A tax lien filed against Wells Fargo Bank at the Suffolk County Registry of Deeds is causing concern and confusion among Massachusetts real estate professionals worried about how the legal claim could affect the sale of foreclosed homes.
At issue is a “notice of lien” filed by the state Department of Unemployment Assistance in late October, claiming Wells Fargo is a “delinquent employer” and owes the state more than $70,000 for unpaid contributions and interest to the state unemployment insurance fund.
The state said the lien — a legal claim against a taxpayer’s assets — has been placed on “any property, real or personal, tangible or intangible,” connected with Wells Fargo in Massachusetts.
Several real estate attorneys said that means the lien could extend to the titles of any foreclosed homes purchased from Wells Fargo since October in Suffolk County or beyond, putting their ownership in question. In theory, the state has a legal claim to any property Wells Fargo owns and then sells to a third party in Suffolk County, according to Peter Wittenborg, executive director of the Real Estate Bar Association for Massachusetts.
Wells Fargo said this week it is working with the state “to get this matter resolved” and wouldn’t comment specifically on the state’s claims or how the lien could affect the company’s business dealings in Massachusetts.
“We handle the sale and disposition of our properties in a responsible manner,” said Jim Hines, a Wells Fargo spokesman.
Wittenborg said the lien probably went unnoticed for months because most title examiners do not customarily check the financial health of lenders when preparing for a home sale. He was alerted to the problem this week by an attorney who did the extra research and ended up postponing a real estate closing after discovering the glitch.
“It would have serious consequences on any properties” sold by the bank in Suffolk County, Wittenborg said.
Westborough title attorney Elizabeth J. Barton criticized the state, calling the lien an unusual way for government to try to resolve a financial dispute with a bank. “It can potentially interfere with every piece of property that Wells Fargo holds title to,’’ Barton said. “It is a very strange thing to do. It doesn’t make any sense.”
Kevin Franck, director of communications for the state Executive Office of Labor and Workforce Development, said he could not comment on the matter.
Real estate attorney James Rudser said he discovered the problem in December when carrying out a title search for an investor interested in buying a foreclosed property in Dorchester. After the discovery, his buyer decided to postpone the sale. “My guy is ready to get in there, clean it up, rent it, and do something positive,” Rudser said. “I’m perplexed as to how Wells Fargo has allowed this to occur for so long.’’