This past Monday Countrywide, Bank of America, as well as a suite of others got hit with Another Lawsuit. 

This time from Life Insurance Policies  in which it is alleged that Countrywide sold a lot of bogus paper to pretty much every large insurance company in the world.  Whereas Countrywide told these investors that they were selling good paper, but in effect it was a load of crap.   Remember that Countrywide bundled the loans when they were originated (or sometimes before as the forensic loan audits are revealing) – then they sold them off as mortgage backed securities to investors on Wall Street.  The paper was ranked – apparently not correctly since BofA is getting sued left and right on all sides.  The article may be a bit technical for most, but the bottom line is that Countrywide, Bank of America, and a suite of other lenders and servicers are facing lawsuits for fraud, misrepresentation, etc on all sides.  Most likely if you have a Countrywide or Bank of America loan your loan is in one of these mortgage backed securities. 

 Previous articles that we wrote tell that these type of loans techinically should be almost impossible to foreclose on.  But foreclosures are happening anyways. If you are trying to save your home, or if you have a bad loan you don’t have to sit back and let the banks win.  You have options.

1. Start with a forensic loan audit to know what’s really going on with your loan.

2. Then take action.  A Class Action Lawsuit is the most cost effective, and safe way to move forward legally. Banks have deep pockets, and so joining together with other homeowners is a smart decision.  Call (831) 621-1149 and reference Troubled Property Solutions for details.

Here’s their allegations – the basis of the lawsuit:
Article Posted 2011-01-24 18:41
Market Tickler
by Karl Denninger

Countrywide Failed To Ensure That Title To The Underlying Loans Was Effectively Transferred

The rules for these transfers are governed by the law of the state where the property is located, by the terms of the pooling and servicing agreement (“PSA”) for each securitization, and by the law governing the issuing trust (with respect to matters of trust law). Generally, state laws and the PSAs require the promissory note and security instrument to be transferred by indorsement, in the same way that a check can be transferred by indorsement, or by sale. In addition, state laws generally require that the trustee have physical possession of the original, manually signed note in order for the loan to be enforceable by the trustee against the borrower in case of default.

In order to preserve the bankruptcy-remote status of the issuing trusts in RMBS transactions, the notes and security instruments are generally not transferred directly from the mortgage loan originator to the trust. Rather, the notes and security instruments are generally initially transferred from the originator (e.g., Countrywide Home) to the depositor (e.g., CWALT), either directly or via one or more special-purpose entities established by Countrywide Financial. After this initial transfer to the depositor, the depositor transfers the notes and security interests to the issuing trust for the particular securitization. Each of these transfers must be valid under applicable state law in order for the trust to have good title to the mortgage loans.

In addition, the PSA generally requires the transfers of the mortgage loans to the trust to be completed within a strict time limit after formation of the trust in order to ensure that the trust qualifies as a tax-free real estate mortgage investment conduit (“REMIC”).

 The applicable state trust law generally requires strict compliance with the trust documents, including the PSA, so that failure to comply strictly with the timeliness, indorsement, physical delivery, and other requirements of the PSA with respect to the transfers of the notes and security instruments means that the transfers would be void and the trust would not havegood title to the mortgage loans.

The Offering Documents for each offering of the Certificates represented in substance that the issuing trust for that offering had obtained good title to the mortgage loans comprising the pool for the offering. In reality, however, Countrywide routinely failed to comply with the requirements of applicable state laws and the PSAs for valid transfers of the notes and security instruments to the issuing trusts. In Kemp .v. Countrywide Home Loans, Inc., Bkrtcy. No. 08-18700 (D.N.J.), Countrywide sought to prove that the Bank of New York, as trustee for an RMBS issuing trust that purportedly held Mr. Kemp’s mortgage, was entitled to enforce the mortgage. Countrywide presented testimony by Linda DeMartini, who had been employed by Countrywide Servicing for almost ten years as of August 2009 and was then a supervisor and operational team leader for the Litigation Management Department of Countrywide Servicing. Ms. DeMartini testified that, in her extensive career in the mortgage loan servicing business of Countrywide, “I had to know about everything . . . .” She testified that Countrywide Home originated Kemp’s loan in 2006 and transferred it to the Bank of New York as trustee for the issuing trust, but that Countrywide Servicing retained the original note in its own possession and never delivered it to the Bank of New York because Countrywide Servicing was the servicer for the loan.

For the full article and a copy of the lawsuit go to: http://market-ticker.org/akcs-www?post=178151