Deutsche Bank AG has settled a class action suit with disgruntled MBS investors for $32.5 million, after plaintiffs argued that they received false and misleading information regarding their investment. The securities were pass-through Alt A MBS issued by Deutsche between May 2006 and May 2007, which were subsequently downgraded and are no longer marketable at prices anywhere near the price paid by plaintiffs and the class, said an amended complaint. The class action, filed in 2008 by unions Massachusetts Bricklayers and Masons Trust Funds, the Pipefitters Retirement Fund Local 597...
The Securities and Exchange Commission and Wells Fargo are in a dispute regarding due diligence reports relating to almost $60.0 billion in non-agency mortgage-backed securities issued by Wells between September 2006 and early 2008. The SEC last week filed a subpoena enforcement action against Wells for failure to produce documents. The bank disputes the SECs account. The SEC said it has been seeking the documents since September. The regulator claimed that Wells agreed to produce the documents but has failed to do so. The SEC said its action relates to its investigation into whether Wells made material misrepresentations or omitted material facts on certain non-agency MBS issued by the bank ...
Iowa Attorney General Tom Miller downplayed concerns raised by investors in non-agency mortgage-backed securities regarding the pending $25.0 billion servicing settlement. The current set of concerns arent particularly warranted, he said this week during a webinar hosted by Inside Mortgage Finance Publications. The Association of Mortgage Investors has asked for a number of changes to the settlement, including a cap on the amount of principal reduction that can be completed on non-agency MBS to meet the participating servicers loss mitigation requirements. Miller said the AMI is the only group he is aware of that might challenge approval of the settlement by the U.S. District Court for the District of Columbia. I think that their concerns are not going to be realized ...
Banks will receive some release from liability for loan originations in the $25 billion mortgage settlement involving the industrys five largest servicers, state attorneys general and the federal government, according to experts participating in an Inside Mortgage Finance webinar this week. While the settlement is often described as landmark, industry experts note that major components were drawn from a hodgepodge of federal and state initiatives. The detailed servicing standards, for example, are a synthesized cut-and-paste from sources including Office of the Comptroller of the Currency...
Last week, the 2nd Circuit Court of Appeals ruled that Judge Jed Rakoff of the District Court for the Southern District of New York erred when he blocked the $285 million agreement the Securities and Exchange Commission and Citigroup struck to settle a dispute over MBS that later turned toxic when the market tanked. Market observers think it likely means the settlement is back on track, and a good sign for the market, with sanity and certainty prevailing, as one put it. In U.S. Securities & Exchange Commission v. Citigroup Global Markets Inc., the district court this past November refused to approve a...
A conservative, non-partisan public interest group has filed suit against the Federal Housing Finance Agency, claiming the FHFA has improperly denied the groups request for documents relating to the Finance Agencys decision to sue 17 financial institutions last fall on behalf of Fannie Mae and Freddie Mac over alleged misrepresentations of mortgage-backed securities.Last week, Judicial Watch filed its lawsuit in the U.S. District Court for the District of Columbia after the FHFA denied the groups Freedom of Information Act request for documents related to the agencys litigation. The Finance Agency argued that as private companies, FOIA requests do not apply to Fannie and Freddie.
The recent Servicing Resolution Agreements signed by the nations top five mortgage servicers with the federal government and state attorneys general may have been clear on the cost of their key provisions but it is the enormous hidden costs of compliance that could bite the financial institutions in the long run, according to compliance experts. Following the recent announcement of the national servicing settlement, it is impossible to put an accurate dollar amount on the myriad things servicers need to do in order to comply, but experts agree that staffing, training, technological upgrades...
In a development that ultimately could affect legions of homeowners who couldnt get a permanent loan modification, the U.S. Court of Appeals for the Seventh Circuit recently gave the go-ahead to a borrower class action against a mortgage servicer for not providing a permanent loan modification under the Home Affordable Modification Program. We believe this affects hundreds of thousands of people, if not more not just at Wells Fargo, but also with respect to other banks who havent been able to get their loan modifications like they should have, given their compliance with their trial plans...
The settlements reached by five major mortgage servicers with a handful of states over their use of the Mortgage Electronic Registration System has not weakened the legal position of MERSCorp itself, according to industry experts. The new agreements signed by New York Attorney General Eric Schneiderman with Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and Ally Financial has the banks paying a total of $25 million to the state in exchange for a release of further claims regarding the banks use of MERS throughout the servicing and foreclosure process and a pledge not to challenge...
The emerging consensus among industry analysts and attorneys who are reviewing the finalized documentation of the $25 billion servicing settlement is that state and federal government law enforcement officials are just getting started in their efforts to hold the industrys feet to the fire over flawed foreclosure practices. Last week, the Department of Justice finally made public the official complaint and consent judgments for the $25 billion servicing settlement that had been announced the month before, the details of which seem to be largely in line with expectations...