Financial Real-Estate, Research Paper Example

Is there any reason Smith should be able to get the property back?

According to all the facts provided in the case, Smith indeed has failed to honor his financial obligations on the loan taken from Wells Fargo. While the beneficiary, Wells Fargo, appears to have observed due procedure in the execution of the foreclosure, there are grounds on which Smith can claim is property back.

Firstly, even though Smith did not make the monthly payments and evidently failed to pay off the loan, he had the capacity to pay off the remaining balance on the loan. Smith had $500,000 in deposits in an account with Wells Fargo. With this bank account balance, Smith clearly has the ability to pay off the owed $85,710 as of January 16, 1991. This is a violation of the contract, as the intention of the beneficiary can be put to question.

Secondly, the Wels Fargo as the beneficiary failed to honor the request of one of their clients to have their funds redirected towards payment of the amounts due. Smith can site negligence and ill intent by the bank in failing to honor his request. Smith’s bank deposits were more than enough to complete the payment to avoid foreclosure.

Thirdly, the valuation is clearly a point of contention between the trustor and the beneficiary. Wells Fargo insisted on having their own appraisal of the property’s worth before sale even though the cost fees are considerably high. Smith can claim improper valuation as the property was sold for far much less than its worth, raising concern on the effect this sale has on the trustor.

Finally, the Bank is arguably engaged in a case of mortgage fraud. This is because Wels Fargi had within their means, a way of recovering the full value of the amount owed from the trustor, Smith. The account held by the trustor with the financial institution had the funds required to settle the balance on the loan. However, the bank opted for a more profitable method, leading to the foreclosure, ignoring any amounts the institution owed Smith.

Why did Wells Fargo decline to deduct the money Smith owed from his other accounts when he called them to give them permission?

Wells Fargo is a financial institution that sought to protect its interests in this scenario. The bank accounts held by Smith with Wells Fargo represent a contractual agreement between Wells Fargo and Smith to keep the amounts agreed upon at a fixed charge. While redirecting the funds may appear to be a direct forward alternative to the bank, there are numerous things to be considered.

The bank only issues credit based in an individual’s credit rating. This may have significantly influenced the bank’s decision to decline Smith’s request to have his funds redirected towards payment of the loan. By declining Smith’s request, the bank has considered Smith’s ability to meet any pending financial obligations that may affect his credit rating and financial position.

The bank must also consider all costs associated with redirecting funds from Smith’s personal accounts to finance his debt. Processing cycles can be quite complex and costly, necessitating the need for another account to pay off the loan. The bank would have agreed to Smith’s request, if he had requested for the opening of a new checking account specifically to settle the amounts due. A second checking account would have provided the financial institution with the safety required to ensure security of their investments.