Archives: Residential Mortgage-Backed Securities (RMBS)

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New Wave of Lehman Litigation Appears to Be Imminent

Thousands of mortgage lenders across the country either recently received, or will soon be receiving, this document from Lehman Brothers Holdings, Inc. (LBHI). It is a notice of a motion to approve a proposed settlement of Residential Mortgage-Backed Securities (RMBS) claims asserted by trustees and investors against LBHI over the last few years. The notice … Continue Reading

Key Legal & Regulatory Issues for Financial Services Companies in 2017

With 2016 rapidly drawing to a close, here are some thoughts regarding the types of litigation and legal/regulatory issues that will likely be top-of-mind for financial services companies, especially mortgage companies and banks, in 2017: RMBS Suits and Mortgage Repurchase or Indemnification Claims I admit it—I never would have thought, when I started working on … Continue Reading

Happy Holidays To Our Readers!

As we reflect on 2015, we are especially thankful for all of the connections that we have made this year. We are thankful for our clients, our colleagues, our friends, and all of our readers. Thus, for our holiday video we wanted to focus on the power of relationships because our relationships are the foundation … Continue Reading

CFPB, DOJ Show Renewed Interest in Pursuing “Redlining” Cases

Evidence is mounting that the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) are taking a renewed interest in investigating possible redlining—the practice of lenders charging certain groups more for products, or altogether excluding minorities within certain geographic areas. There has been a substantial increase in recent months of warnings by government … Continue Reading

Quicken Loans Takes on the DOJ & HUD

Quicken Loans, the nation’s largest Federal Housing Administration (FHA)-backed mortgage lender, filed suit on Friday, April 17 in the United States District Court in Detroit against the United States Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD). In the suit, Quicken alleged that it is a target of a probe in … Continue Reading

BofA’s Inconsistent Positions

Bank of America recently moved to dismiss a lawsuit filed by Ambac Assurance Corp. in New York state court, alleging $600 million in damages for fraudulent inducement in connection with payments it made under policies insuring faulty residential mortgage-backed securities issued by Countrywide. In its complaint filed at the end of 2014, Ambac claims that … Continue Reading

A Digital Encyclopedia: Bilzin Sumberg’s Blogosphere

Bilzin Sumberg prides itself as being the go-to firm for domestic and international investors and corporations doing business in Florida and beyond. We aim to provide our clients with legal and business insight into the industries and areas they work in through our various blogs, which hone in on key issues or areas of interest … Continue Reading

Former Analyst Claims Moody’s Falsely Inflated Ratings

Former Moody’s analyst, Ilya Kolchinsky, has accused the credit rating powerhouse of overstating its ratings for countless toxic mortgage-backed securities that caused the financial meltdown in 2008, misleading investors and costing the U.S. billions in funds spent bailing out Wall Street’s too-big-to-fail banks. Kolchinsky’s 107-page False Claims Act complaint, filed in 2012, was recently unsealed … Continue Reading

Citigroup Settles with DOJ for $7 Billion

Citigroup announced last week that it will pay $7 billion to end an investigation by the U.S Department of Justice into misconduct related to its mortgage securitization practices. The blockbuster settlement came days before DOJ lawyers were expected to file a lawsuit. $4.5 billion will go towards settling civil claims related to the DOJ probe, … Continue Reading

Buyback and Indemnifications: The New Dangers

On Thursday, July 31, I will be speaking as part of a panel of business professionals during a live webinar about the continuing repurchase and indemnification risk surrounding mortgage buybacks. This panel will assist mortgage professionals in determining where the greatest exposure of risk lies, and will offer some insightful tips on how best to … Continue Reading

Big Banks Argue that Shorter Limitations Period Should Apply to MBS Claims

Recently, the defendants in FDIC as Receiver for Colonial Bank v. Chase Mortgage Finance Group, et al (Civ No. 1:12-cv-06166) filed a motion for judgment on the pleadings, asking the court to dismiss as time-barred the securities violations alleged against them by the FDIC.  In light of the Supreme Court’s holding in CTS Corp. v. … Continue Reading

Lenders More Likely to Make Jumbo Loans

As we continue to distance ourselves from the advent of the real estate downturn, residential mortgage loan lenders seem to be increasingly willing to explore ways to loan money outside of the “qualified mortgage” arena. For instance, as the author pointed out in a recent N.Y. Times article, lenders are becoming more likely to make … Continue Reading

Judge Denied Bank of America’s Motion to Dismiss $850M Mortgage Fraud Case

Last week, Magistrate Judge David S. Cayer of the U.S. District Court for the Western District of North Carolina denied Bank of America’s motion to dismiss the Security and Exchange Commission’s claims against it in SEC v. Bank of America Corporation, et al. The SEC’s complaint is founded upon allegations that “[t]he Bank of America  … Continue Reading

Recently Unveiled “HOME Forward” Housing Act May Signal the End of Fannie and Freddie

Momentum in housing-finance reformation picked up speed last month as the House Financial Services Committee unveiled the proposed Housing Opportunities Move the Economy (HOME) Forward Act of 2014. The proposed HOME Forward Act was introduced by Rep. Maxine Waters, who stated that the Act provides “an opportunity to address some of the fundamental flaws of the … Continue Reading

Bank of America’s $8.5 Billion Settlement Will Not Be Delayed by AIG

Late last month, a New York state judge denied AIG’s request to delay approval of Bank of America’s $8.5 billion settlement with private investors in connection with certain mortgage-backed securities that had soured. Bank of America agreed to the settlement in June 2011 in order to resolve claims brought by institutional investors such as Black … Continue Reading

Bank of America Foreign Exchange and Mortgage Practices Under Investigation

On Tuesday, Bank of America disclosed in its annual report with the US Securities and Exchange Commission (SEC) that “government regulators” in North America, Europe and Asia are investigating its foreign exchange and mortgage practices and that the U.S. Department of Justice (DOJ) and state attorneys general are also investigating its handling of mortgage loans … Continue Reading

FHFA Says Fannie and Freddie Still Take on Risky Mortgages

Fannie Mae and Freddie Mac have continued to spend billions of dollars on questionable mortgage loans despite previous alerts to potential issues with their appraisals, the Federal Housing Finance Agency’s Office of Inspector General said Thursday. According to a new report, the mortgage giants ignored warnings from the FHFA’s data portal about underwriting violations, such … Continue Reading

Federal Court Follows Recent Statute of Limitations Decision for Mortgage Buyback Claims

ACE Securities Case Determined that Statute of Limitations Begins at Sale of the Loan; Other Courts Have Begun to Follow Suit We recently posted about a critical ruling out of New York’s intermediate state appellate court, the case of ACE Securities Corp. v. DB Structured Products, Inc., 977 N.Y.S.2d 229, 231 (N.Y.A.D. 1st Dept. Dec. 19, 2013). … Continue Reading

Mortgage Crisis Penalty for the Real Wolves of Wall Street Could Top $50 Billion

The real wolves of Wall Street–sixteen of America’s largest banks–could end up shelling out more than $50 billion to secure settlements from the federal government in connection with their alleged roles in the mortgage crisis. Of this amount, up to $15 billion would go directly to affected homeowners in the form of cash payments and/or … Continue Reading

NY Appellate Court Reverses Decision on Statute of Limitations for Mortgage Buyback Claims

On December 19, 2013, correspondent lenders were the beneficiaries of a long-awaited common sense ruling on when the statute of limitations begins to run under New York law for purposes of a mortgage buyback claim. The common-sense answer: when the loan was sold by the correspondent lender (as we have been saying all along!). Statute … Continue Reading

FHFA Announces $1.9 Billion Settlement With Deutsche Bank

On December 20, 2013, the Federal Housing Finance Agency (“FHFA”), as conservator of Fannie Mae and Freddie Mac, announced that it will receive settlement payments of $1.925 billion from Deutsche Bank AG in connection with claims of alleged violations of federal and state securities laws related to private-label, residential mortgage-backed securities purchased by Fannie Mae … Continue Reading

JPMorgan Chase Agrees to $13 Billion Settlement with the U.S. Justice Department for Knowingly Selling Toxic Mortgage-Backed Securities

On Tuesday, the United States Justice Department announced that it finalized a settlement agreement with JPMorgan Chase for $13 billion. This settlement will resolve a multitude of state and federal investigations into JPMorgan Chase’s sale of residential mortgage-backed securities to investors between 2005 and 2008. In addition to paying fines for securities violations, the proceeds … Continue Reading

FHFA’s $5.1 Billion Settlements With J.P. Morgan Chase

On October 25, 2013, the Federal Housing Finance Agency (“FHFA”), as conservator of Fannie Mae and Freddie Mac, announced that it will receive settlement payments of $5.1 billion with J.P. Morgan Chase & Co. in connection with claims of alleged violations of federal and state securities laws related to private-label, residential mortgage-backed securities purchased by Fannie … Continue Reading

LXBN TV Video Interview regarding Bank of America Lawsuits

Following up on my recent post on the cases, I had the opportunity to speak with  Colin O’Keefe of LXBN TV  regarding the recent fraud suits filed by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) against Bank of America. The suits accuse Bank of America of allegedly defrauding buyers of mortgage-backed securities by … Continue Reading
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