| Author | Message | ||
     Xxx Comedian Username: Xxx Post Number: 1192 Registered: 04-2009 Posted From: 166.82.172.153 Rating: N/A |
the stock market touched 6500, fed will not let it happen, naa ishtam ...antha mee ishtam babu doraa | ||
| Ashton Side Hero Username: Ashton Post Number: 9357 Registered: 05-2008 Posted From: 66.90.104.94 Rating: N/A |
GS predicted the same thing about Lehmann bro's in 2007. | ||
| Xxx Comedian Username: Xxx Post Number: 1191 Registered: 04-2009 Posted From: 166.82.172.153 Rating: N/A |
bac is too big to fall naa ishtam ...antha mee ishtam babu doraa | ||
| Ashton Side Hero Username: Ashton Post Number: 9353 Registered: 05-2008 Posted From: 66.90.104.94 Rating: N/A |
http://www.dailyfinance.com/story/credit/bank-of-america-mor tgage-document-errors-trouble-countrywide/19728402/ Testimony in a New Jersey foreclosure case decided last week may spell big trouble for Bank of America (BAC). If what one bank employee said on the stand proves to be accurate, paperwork problems it acquired when it purchased the failing mortgage provider Countrywide in 2008 could leave BofA on the hook for billions of dollars. As first reported by Kate Berry for American Banker, Linda DiMartini, a supervisor and operational team leader for the Litigation Management Department of BAC Home Loans Servicing, testified in the foreclosure case of John T. Kemp that it was "customary for Countrywide to maintain possession of the original note and related documents." If that's true, then Bank of America may discover that it has millions of loans on its books that it thought it had transferred to trusts that issued mortgage backed securities, because 96% of Countrywide loans were ostensibly securitized. As the Congressional Oversight Panel explained, that outcome alone could cause massive damage to a bank's balance sheet. And as bad as that would be, it isn't the only problem that could result from Countrywide hanging on to the notes. If the mortgage-backed securities aren't in fact "mortgage-backed," investors who bought them could be able to force BofA to buy the securities back. A significant number of buybacks could on its own destroy BofA's balance sheet. Nor could BofA stave off either outcome retroactively by delivering those notes today. First, the contracts that created the trusts would typically forbid transferring the loans into the trusts now. Second, even if somehow that could happen, such a transfer would destroy the special tax status the mortgage backed securities enjoy and give the investors a different reason to put back the securities or sue over them. Retaining Documents While Servicing the Loans At oral argument, BofA's attorney conceded that DiMartini's testimony was accurate and that as a result, BofA had failed to deliver the note at issue in that case to the trust under the contract or otherwise applicable law: "[A]lthough Your Honor is right and the UCC and the Master Servicing Agreement apparently requires [physical delivery of the note to the trustee], procedure seems to indicate that they don't physically move documents from place to place because of the fear of loss and the trouble involved and the people handling them. They basically execute the necessary documents and retain them as long as servicing's retained. The documents only leave when servicing is released." The judge ominously replied: "They take their chances." Bank of America, via its spokesman Larry Platt, who is a partner at K&L Gates in Washington, told DailyFinance: "Countrywide's policy and practice has been and remains to fully comply with the pooling and servicing agreements, including forwarding any necessary documents to the trustee. The associate whose testimony was cited in the ruling was asked about a process outside her normal scope of responsibilities and in an entirely different department from where she worked. A review of her testimony shows she later clarified that she was not comfortable testifying about the circumstances under which original loan documents would move, or whether and to what extent they ever are moved. This would include the initial delivery of original loan documents to the trustee." Bruce Levitt, the attorney representing Kemp commented: "DeMartini was flown to New Jersey from California to testify as the document custodian, the person BofA chose to get the note and other documents admitted as evidence. She was refreshingly unrehearsed; she testified with confidence and candor. She wanted the judge to understand that BofA was very careful with the notes." Moreover, if Platt is right and Countrywide always delivered the notes, why did BofA's attorney in the Kemp case make the admission to the contrary quoted above? If Countrywide didn't deliver the notes, how many loans are at issue? Well the loan in question in the specific court case -- Kemp v. Countrywide Home Loans -- was supposedly securitized in June 2006. So securitizations involving Countrywide loans for at least some time before that date and certainly thereafter are affected. And this case begs the wider question: Is it really possible that it was only Countrywide that followed the practice of not physically delivering the documents of securitized mortgages? "There's been talk on the street for years that banks didn't send the notes up the line when they did securitizations," explained Max Gardner, a consumer bankruptcy attorney not affiliated with this case but who has litigated foreclosures based on bad bank documents for years. "But this is the first time I've seen someone under oath admit there was a policy not to deliver the notes. I had to read it twice to make sure that's really what she said, but she did: It was customary." |
