Monday, October 18, 2010

First Shots Fired in the Foreclosuregate War!

And we're off..............

"Institutional Holders of Countrywide-Issued RMBS Issue Notice of Non-Performance Identifying Alleged Failures by Master Servicer to Perform Covenants and Agreements in More Than $47 Billion of Countrywide-Issued RMBS

PR Newswire

8:05 PM Eastern Daylight Time Oct 18, 2010

HOUSTON, Oct. 18 /PRNewswire/ --Today, the holders of over 25% of the Voting Rights in more than $47 billion of Countrywide-issued RMBS sent a Notice of Non-Performance (Notice) to Countrywide Home Loan Servicing, as Master Servicer ("Countrywide Servicing"), and to Bank of New York, as Trustee, identifying specific covenants in 115 Pooling and Servicing Agreements (PSAs) that the Holders allege Countrywide Servicing has failed to perform.

The Holders' Notice alleges that each of these failures has materially affected the rights of the Certificateholders under the relevant PSAs. Under Section 7.01 of the PSAs, if any of the cited failures "continues unremedied for a period of 60 days after the date on which written notice of such failure has been given ... to the Master Servicer and the Trustee by the Holders of Certificates evidencing not less than 25% of the Voting Rights evidenced by the Certificates," that failure constitutes an Event of Default under the PSAs.

In a previous release, the Holders emphasized their intent to invoke all contractual remedies available to them to recover their losses and to protect their rights. Kathy Patrick of Gibbs & Bruns LLP, lead counsel for the Holders, emphasized that the Holders' notice does not seek to halt loan modifications for troubled borrowers. Instead, it urges the Trustee to enforce Countrywide Servicing's obligations to service loans prudently by maintaining accurate loan records, demanding the repurchase of loans that were originated in violation of underwriting guidelines, and compelling the sellers of ineligible or predatory mortgages to bear the costs of modifying them for homeowners or repurchasing them from the Trusts' collateral pools.

Patrick also noted that the group of Holders that tendered today's Notice of Non-Performance is larger, and encompasses more Countrywide-issued RMBS deals, than were included in the August 20 instruction letter. When asked why the group of holders was larger, Patrick replied, "Ours is a large, determined, and cohesive group of bondholders. We have a clearly defined strategy. We plan to vigorously pursue this initiative to enforce Holders' rights."

Quick Take:

Well that didn't take long.  I thought the legal vultures would need a little more time.

Bend over Bank of America!  I bet you now deeply regret the day you were forced to eat that Countrywide s**t sandwich.

This is going to get really interesting.  The institutions involved in these suits have pockets just as deep as the banks, and it's become pretty clear as foreclosuregate gains traction that they were sold a pile of MBS dog doo that appears to be worthless.

As the muddied waters become more clear, the institutions realize that it's better to be first in line because there likely won't be any money left down the road as everyone lawyers up and begins demanding to be made whole.

Wait until the pensions get on board this train.  This is a trillion dollar nightmare folks.

Banker versus Banker.  What more could you ask for?

1 comment:

Anonymous said...

darkness... grasping at the darkness.

until they all pull themselves into the abyss.

good fricken riddance.

countrywide was a basketcase.. who knows where the paperwork screw ups were as they acquired all those mortgages from smaller firms, now extinct.

a new wave of challenges to forclosures, a continuing exodous of mainstreet capital from digital savings, reduced or nonexistent real estate contracts for money creation, and a general tax revolt should curb the corrupt system and bring things a bit closer to the folks at the bottom that are watching... waiting..