Five deals were issued during the quarter, led by a $2.65 billion MBS from Chase that combined mortgages eligible for sale to the government-sponsored enterprises and jumbo loans.
The post-crisis market environment that fueled the mortgage loan buyback dynamic continues to improve, and with it, the business relationships between lenders, investors and the government-sponsored enterprises. However, the repurchase and indemnification phenomenon has not gone away and is unlikely to do so for the foreseeable future. That means market participants need a comprehensive strategy to limit their exposure to litigation and, when that fails, to restrict the damage that does ensue, according to some top industry attorneys. This may be particularly important for correspondent lenders. “In order to go ahead and get a good perspective for what your company’s potential risk is, how do you go...
A Manhattan district court judge last week dismissed lawsuits brought by the Federal Deposit Insurance Corp. against three large banks, saying the agency no longer has standing to sue after it sold the defective mortgages through a re-securitization transaction. Judge Andrew Carter of the U.S. District Court for the Southern District of New York threw out the government’s suits against Citigroup, Bank of New York Mellon and U.S. Bancorp, which accused the banks of failing as trustees to ensure the quality of $2.7 billion in MBS purchased by the failed Texas-based Guaranty Bank. Reuters was the first to report Carter’s decision. Guaranty went...
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