The facts are the facts. I am not going to add much commentary to this damaging blog post because it is what it is. All I know is Angelo (Ex-Countrywide CEO) is gonna have some explaining to do to Mr. Lewis (CEO for Now of B of A) over some egg nog and whiskey.
Here are links, facts, data and concrete evidence that clearly proves that Countrywide and Bank of America have a tough legal fight ahead of them in Bill Frey and Greenwich Financial. Bank of America and their shareholders may be on the legal hook to buy back tens of billions in countrywide modified mortgages that are part of the state attorney general settlement from investors.
Please keep in mind investors are not just fat cat speculators. Police officers, firemen and your state’s university retirement funds might be heavily invested in these mortgage backed securities -MBS. (As in the case with the State of Illinois State Universities Retirement System invested in the subject MBS’s which you will see below)
Actual Greenwich lawsuit against Countrywide and Bank of America:
Under the PSAs that govern the CWL securitizations, any mortgage loan that is modified must be purchased from the trust. Section 3.12(a) of most of these PSAs states: “The Master Servicer may agree to a modification of any Mortgage Loan (the ‘Modified Mortgage Loan’) if … CHL [Countrywide Home Loans] purchases the Modified Mortgage Loan from the Trust Fund immediately following the modification… .”
Bond investor group “lacks standing” to sue Countrywide-counsel – Reuters
A fund representing bond investors seeking to force Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz)-owned Countrywide Financial to repurchase thousands of mortgages failed to satisfy requirements to sue under contracts governing the securities, according to Countrywide attorneys.
“Whatever may be motivating the lawsuit, your legal theory is wrong; Countrywide has authority to make the planned modifications, and it intends to do so,” he said.
Here is a link to an actual Pooling and Servicing Agreement (PSA) on the SEC website that is named in the lawsuit. The PSA is Dated as of January 1, 2004 ALTERNATIVE LOAN TRUST 2004-1T1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-1.
b) The Master Servicer may agree to a modification of any Mortgage Loan (the “Modified Mortgage Loan”) if (i) the modification is in lieu of a refinancing and (ii) the Mortgage Rate on the Modified Mortgage Loan is approximately a prevailing market rate for newly-originated mortgage loans having similar terms and (iii) the Master Servicer purchases the Modified Mortgage Loan from the Trust Fund as described below.
Effective immediately after the modification, and, in any event, on the same Business Day on which the modification occurs, all interest of the Trustee in the Modified Mortgage Loan shall automatically be deemed transferred and assigned to the Master Servicer and all benefits and burdens of ownership thereof, including the right to accrued interest thereon from the date of modification and the risk of default thereon, shall pass to the Master Servicer.
The Master Servicer shall promptly deliver to the Trustee a certification of a Servicing Officer to the effect that all requirements of this paragraph have been satisfied with respect to the Modified Mortgage Loan. For federal income tax purposes, the Trustee shall account for such purchase as a prepayment in full of the Modified Mortgage Loan
Investors are often looked at has speculators and they should suffer. But would you consider the State of Illinois State Universities Retirement System who invested in these mortgage backed securities speculators? Should Illinois University retirees lose it all because Countrywide agreed to modify loans with the Attorney General?
Please refer to page 124 that shows that Illinois State University Employees own these mortgages too. Here is a financial audit from 2006 of the State Universities Retirement System
$786,153.88 CMO CWALT INC 2004-56 MTG PASSTHRU CTF CL 2-A-1 6.5% DUE 11-25-2031 REG
$2,795,683.22 CMO CWALT INC 2005-59 MTG BKD CTF CL A-1 DUE 11-20-2035 REG
$1,182,619.63 CMO CWALT INC 2006-OA6 MTG PASSTHRU CTF CL IA-1A DUE 07-25-2046 REG
$1,766,984.22 CMO CWALT INC COUNTRYWIDE ALTERNATIVE DUE 07-25-2035 BE0
$432,067.28 CMO CWALT INC SER 2004-18CB CL 2A5 FLT RT DUE 09-25-2034 REG
$1,879,215.41 CMO CWALT INC SER 2005-20CB CL 2-A-3 5.5% DUE 07-25-2035 REG
$6,799,027.81 CMO CWALT INC SER 2005-81 CL A1 FLT RT DUE 02-25-2036 REG
$5,517,461.13 CMO CWALT INC SER 2006-6CB CL 1A10 5.5% DUE 05-25-2036 REG.
GREENWICH FINANCIAL SERVICES DISTRESSED MORTGAGE FUND 3, LLC, and QED LLC
http://www.securitization.net/pdf/content/Wachovia_25Aug05.pdf List of CW securitizations from 2004-2005.
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