I.M. G. posted an article on The Subprime Shakeout - Apr 26, 2011, 8:41 pm
Is Bank of America on the hook for Countrywide’s liabilities for defective loans?  Depends on which judge you ask. With the recent decision by Judge Mariana Pfaelzer to dismiss BofA as a defendant in the case of Maine State Retirement System v. Countrywide Financial Corp., et al. (“Opinion,”...
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I.M. G. posted an article on The Subprime Shakeout - Mar 29, 2011, 4:02 pm
Just when you thought the hubbub surrounding mortgage backed securities (MBS) was starting to subside, federal regulators have taken their most aggressive stance yet against the banks that sold toxic loans as investment grade securities, according to an article in the Wall Street Journal (subscripti...
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I.M. G. posted an article on The Subprime Shakeout - Mar 29, 2011, 3:15 pm
Just when you thought the hubbub surrounding mortgage backed securities (MBS) was starting to subside, federal regulators have taken their most aggressive stance yet against the banks that sold toxic loans as investment grade securities, according to an article in the Wall Street Journal (subscripti...
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I.M. G. posted an article on The Subprime Shakeout - Feb 16, 2011, 1:33 pm
Fed. Reserve Gov. Sarah Raskin I just returned from my first Midwinter Housing Finance Conference in Park City, Utah.  Though the conference, organized by Brian Hershkowitz, has been an annual favorite of snow-loving housing professionals for decades, it tends to receive far less publicity tha...
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I.M. G. posted an article on The Subprime Shakeout - Feb 16, 2011, 5:33 am
I just returned from my first Midwinter Housing Finance Conference in Park City, Utah.  Though the conference, organized by Brian Hershkowitz, has been an annual favorite of snow-loving housing professionals for decades, it tends to receive far less publicity than the American Securitization Forum ...
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I.M. G. posted an article on The Subprime Shakeout - Feb 2, 2011, 6:37 pm
A few weeks ago, I published an article suggesting that the increased cooperation of MBS trustees may signal the turning point in bondholder litigation.  It seems I'm not alone in reaching this conclusion. The following week, on January 27, Adam Levitin, associate law professor at George...
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I.M. G. posted an article on The Subprime Shakeout - Feb 2, 2011, 6:37 pm
A few weeks ago, I published an article suggesting that the increased cooperation of MBS trustees may signal the turning point in bondholder litigation.  It seems I’m not alone in reaching this conclusion. The following week, on January 27, Adam Levitin, associate law professor at Georgetown Uni...
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I.M. G. posted an article on The Subprime Shakeout - Jan 25, 2011, 1:53 pm
In a pleading filled with allegations that can only be described as shocking, Ambac has accused Bear Stearns and its former subsidiary EMC Mortgage (both now owned by JP Morgan) of a parade of horribles in its proposed amended complaint in its case over defective residential mortgages in the Souther...
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I.M. G. posted an article on The Subprime Shakeout - Jan 25, 2011, 1:53 pm
In a pleading filled with allegations that can only be described as shocking, Ambac has accused Bear Stearns and its former subsidiary EMC Mortgage (both now owned by JP Morgan) of a parade of horribles in its proposed amended complaint in its case over defective residential mortgages in the Souther...
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I.M. G. posted an article on The Subprime Shakeout - Jan 21, 2011, 6:41 pm
Will we look back at this point in the mortgage crisis fallout as the turning point for RMBS investors?  With the news that Wells Fargo, as securitization trustee, has sued EMC Mortgage in Delaware Chancery Court over loan files, trustee cooperation with bondholders is starting to feel distinctly l...
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I.M. G. posted an article on The Subprime Shakeout - Jan 21, 2011, 6:41 pm
Will we look back at this point in the mortgage crisis fallout as the turning point for RMBS investors?  With the news that Wells Fargo, as securitization trustee, has sued EMC Mortgage in Delaware Chancery Court over loan files, trustee cooperation with bondholders is starting to feel distinctly l...
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I.M. G. posted an article on The Subprime Shakeout - Jan 7, 2011, 7:54 pm
The Massachusetts Supreme Court has issued its highly-anticipated opinion in the case of US Bank National Association v. Ibanez (and the related case of Wells Fargo Bank v. LaRace), bringing with it more bad news for the lending industry.  The unanimous opinion, authored by Justice Ralph Gants (av...
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I.M. G. posted an article on The Subprime Shakeout - Jan 7, 2011, 7:54 pm
The Massachusetts Supreme Court has issued its highly-anticipated opinion in the case of US Bank National Association v. Ibanez (and the related case of Wells Fargo Bank v. LaRace), bringing with it more bad news for the lending industry.  The unanimous opinion, authored by Justice Ralph Gants (av...
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I.M. G. posted an article on The Subprime Shakeout - Jan 4, 2011, 5:29 pm
On October 22, 2010, I appeared Bloomberg Radio’s “The Hays Advantage” with Kathleen Hays to discuss issues facing RMBS investors in litigation against originators and underwriters.  A number of readers have asked me if a recording of the interview was available.  Below, please find links to...
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I.M. G. posted an article on The Subprime Shakeout - Jan 4, 2011, 5:29 pm
On October 22, 2010, I appeared Bloomberg Radio's "The Hays Advantage" with Kathleen Hays to discuss issues facing RMBS investors in litigation against originators and underwriters.  A number of readers have asked me if a recording of the interview was available.  Below, please find links to that ...
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I.M. G. posted an article on The Subprime Shakeout - Dec 29, 2010, 8:34 pm
The news gets worse for Bank of America.  Not only will it have to eat massive numbers of Countrywide-originated loans, but the bank may have to complete repurchases sooner than previously thought.  Judge Eileen Bransten's long-awaited evidentiary ruling in the New York state court makes it clear ...
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I.M. G. posted an article on The Subprime Shakeout - Dec 29, 2010, 8:34 pm
The news gets worse for Bank of America.  Not only will it have to eat massive numbers of Countrywide-originated loans, but the bank may have to complete repurchases sooner than previously thought.  Judge Eileen Bransten’s long-awaited evidentiary ruling in the New York state court makes it clea...
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I.M. G. posted an article on The Subprime Shakeout - Dec 7, 2010, 6:49 pm
In the first substantive decision handed down in any of the five major lawsuits by the Federal Home Loan Banks (FHLB) over RMBS losses, the Hon. Stanton Wettick, Jr. of the Court of Common Pleas of Allegheny County, Pennsylvania dealt a blow to JPMorgan Chase, Countrywide and other securitizers of s...
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I.M. G. posted an article on The Subprime Shakeout - Dec 7, 2010, 6:49 pm
In the first substantive decision handed down in any of the five major lawsuits by the Federal Home Loan Banks (FHLB) over RMBS losses, the Hon. Stanton Wettick, Jr. of the Court of Common Pleas of Allegheny County, Pennsylvania dealt a blow to JPMorgan Chase, Countrywide and other securitizers of s...
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I.M. G. posted an article on The Subprime Shakeout - Nov 22, 2010, 5:12 pm
If you’re looking for a great primer on the latest developments in the legal saga over who will ultimately bear the losses for the detritus that passed as subprime and Alt-A mortgage loans from 2004 to 2007, check out this article published by Jonathan Laing at Barron’s over the weekend.  In th...
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I.M. G. posted an article on The Subprime Shakeout - Nov 22, 2010, 5:12 pm
If you're looking for a great primer on the latest developments in the legal saga over who will ultimately bear the losses for the detritus that passed as subprime and Alt-A mortgage loans from 2004 to 2007, check out this article published by Jonathan Laing at Barron's over the weekend.  In the ar...
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I.M. G. posted an article on The Subprime Shakeout - Nov 8, 2010, 8:35 pm
In a response that can only be described as indignant, Bank of America fired back on November 4 at the group of investors that demanded that Countrywide/BofA repurchase loans in connection with $47 billion worth of private-label mortgage backed securities.  In the strongly-worded letter, a full cop...
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I.M. G. posted an article on The Subprime Shakeout - Nov 2, 2010, 4:40 pm
The ramifications of the Mortgage Crisis are being felt on this Election Day 2010, as the issues of foreclosures, loan modifications and MBS-related losses to pensionholders’ portfolios are being brought to the forefront in some key political battles.  As a prime example, take the heated race for...
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I.M. G. posted an article on The Subprime Shakeout - Oct 21, 2010, 6:57 pm
Below, please find the full text of the letter sent by Kathy Patrick and the law firm of Gibbs & Bruns to Bank of New York and BofA/Countrywide on behalf of private label mortgage investors, including BlackRock, PIMCO, MetLife, Freddie Mac and the New York Fed.  This letter represents one of the fi...
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I.M. G. posted an article on The Subprime Shakeout - Oct 19, 2010, 6:10 pm
Private label residential mortgage backed securities (RMBS) investors, including BlackRock, PIMCO, and the New York Fed, are expected to join MetLife, Inc. in its efforts to force BofA to repurchase defective subprime and Alt-A mortgage loans originated by Countrywide and backing the group's investm...
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I.M. G. posted an article on The Subprime Shakeout - Oct 15, 2010, 4:36 pm
Bank stocks have taken a sharp hit this week as awareness regarding potential liabilities for faulty mortgages and foreclosures reaches critical mass.  You can't turn on the TV or open a newspaper these days without seeing reports on the recent "Foreclosure Crisis" and the resulting for...
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I.M. G. posted an article on The Subprime Shakeout - Oct 13, 2010, 3:58 pm
In a ruling dated October 7, 2010, New York County Supreme Court Judge Barbara R. Kapnick tossed out Greenwich Financial's lawsuit against Countrywide.  The suit sought a declaratory judgment that Countrywide had to repurchase any loans that it modified pursuant to its settlement with state Attorne...
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I.M. G. posted an article on The Subprime Shakeout - Oct 7, 2010, 9:11 pm
I have seen some strange things during my time covering the mortgage crisis, but this one may beat them all.  On August 20, 2010, representative Barney Frank (D-MA) sent a letter to Barack Obama, urging the President to appoint a permanent head of the Federal Housing Finance Agency (FHF...
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I.M. G. posted an article on The Subprime Shakeout - Sep 7, 2010, 2:15 pm
The following story appeared in the September 3, 2010 issue of Inside Nonconforming Markets, a biweekly newsletter focusing on news and data on non-agency mortgages.  This story reflects the growing awareness in the marketplace of the undisclosed mortgage repurchase liabilities facing this nation's...
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I.M. G. posted an article on The Subprime Shakeout - Aug 31, 2010, 5:49 pm
We had a great turnout for the Compass Point call today on mortgage repurchase liability and I thought the questions and remarks of the various participants were interesting and informative.  For those of you who missed the call, you can access a recording by downloading the .wav file at http://au...
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I.M. G. posted an article on The Subprime Shakeout - Aug 25, 2010, 8:11 pm
Compass Point Research & Trading, a registered broker/dealer and one of the leading financial research firms investigating Alt-A and subprime mortgage backed securities (MBS), will be hosting a conference call to discuss mortgage repurchase risks.  The call will be held on Tuesday, August 31, 2010 ...
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I.M. G. posted an article on The Subprime Shakeout - Aug 5, 2010, 2:00 pm
As reported in Bloomberg, the Federal Bank of New York has announced that it is involved in "multiple efforts" to exercise its rights with respect to its holdings in faulty mortgages an other assets acquired through the bailouts of Bear Stearns and AIG.  The Fed holds nearly $70 billion in assets s...
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I.M. G. posted an article on The Subprime Shakeout - Jul 23, 2010, 9:19 pm
As first reported by Reuters on Wednesday, and as further detailed by Bloomberg today, the Investor Syndicate has finally begun to emerge from the shadows and give securitization trustees a hint at what's coming.  According to Talcott Franklin, the Dallas attorney who is spearheading the Syndicate,...
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I.M. G. posted an article on The Subprime Shakeout - Jul 14, 2010, 6:46 pm
The battle being waged by bondholders over access to the loan files underlying their investments was brought into the national spotlight earlier this week, when the Federal Housing Finance Agency (FHFA), the regulator in charge of overseeing Fannie Mae and Freddie Mac, issued 64 subpoenas seeking do...
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I.M. G. posted an article on The Subprime Shakeout - Jun 30, 2010, 1:31 pm
The story just keeps getting worse as more details about Credit Default Swaps (CDS) emerge daily.  CDS were essentially side bets on the performance of other mortgage derivatives, such as mortgage backed securities (MBS) and collateralized debt obligations (CDO). From Michael Lewis' The ...
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I.M. G. posted an article on The Subprime Shakeout - Jun 24, 2010, 2:02 pm
By Manal Mehta, Guest Blogger       The Securities and Exchange Commission (SEC) recently took a much needed step towards improving the transparency of bank balance sheets, particularly when it comes to the adequacy of reserves for mortgage repurchase obligations stemming from banks' violations...
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I.M. G. posted an article on The Subprime Shakeout - Jun 15, 2010, 10:37 pm
Heard on this Street this week: the super-secret Syndicate of MBS Investors discussed previously is gaining momentum.  A confidential source has informed me that some of the largest institutional investors in mortgage-backed securities have now joined the group, bringing the amount under managemen...
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I.M. G. posted an article on The Subprime Shakeout - Jun 10, 2010, 3:56 am
In a move that could have dramatic consequences for the financial stability of Bank of America (BofA), a New York state court judge has held that monoline bond insurer MBIA can go forward with claims that BofA be held vicariously liable for claims against its subsidiary, Countrywide.  BofA has alre...
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I.M. G. posted an article on The Subprime Shakeout - May 10, 2010, 8:34 pm
With government-backed loan modification programs showing abysmal results, Washington has turned to short sales as the flavor of the week to ameliorate the foreclosure crisis.  Pursuant to the Treasury Department's Home Affordable Foreclosure Alternatives (HAFA) initiative, effective April 5, loan ...
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I.M. G. posted an article on The Subprime Shakeout - Apr 29, 2010, 7:00 pm
The legal news is not good if you are a lender or investment bank who participated in the creation of mortgage-backed securities ("MBS") and other derivatives over the last few years.  But for investors who lost their shirts through their investments in these derivative products, the chinks appeari...
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I.M. G. posted an article on The Subprime Shakeout - Apr 16, 2010, 7:41 pm
In a move that represents a significant and unexpected expansion in U.S. regulators' efforts to crack down on Wall Street, the Securities and Exchange Commission ("SEC") has charged Goldman Sachs, Wall Street's most powerful bank, with fraud over its marketing of a subprime mortgage derivative produ...
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I.M. G. posted an article on The Subprime Shakeout - Apr 8, 2010, 2:46 pm
BlackRock, a major asset management firm and one of the largest investors in U.S. mortgage bonds, announced last week that banks would have to absorb the losses on their holdings in second-lien mortgages before it would resume purchasing "private-label" mortgage bonds in any significant quantity.  ...
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I.M. G. posted an article on The Subprime Shakeout - Mar 17, 2010, 1:43 am
One month ago, with the filing by the Federal Home Loan Bank of Seattle of eleven lawsuits against the major Wall Street creators of residential mortgage-backed securities (RMBS), I speculated that the floodgates of investor litigation may finally be swinging open. Yesterday, the filing by the Feder...
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I.M. G. posted an article on The Subprime Shakeout - Feb 18, 2010, 1:45 pm
As reported this week in the Wall Street Journal (article available here, with subscription), the Federal Home Loan Bank of Seattle has filed separate lawsuits against 11 different Wall Street firms, alleging that it was misled about the quality of over $4 billion in mortgage-backed securities. The ...
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I.M. G. posted an article on The Subprime Shakeout - Feb 18, 2010, 1:45 pm
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I.M. G. posted an article on The Subprime Shakeout - Jan 20, 2010, 6:19 pm
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I.M. G. posted an article on The Subprime Shakeout - Jan 20, 2010, 6:19 pm
What follows is an article by Carolyn Austin (contact the author), which was first posted on the Wall St. Cheat Sheet and has been reprinted here with permission. The article discusses an interesting bill being proposed in the House (HR 1207) that calls for a third-party audit of the Fed. I have cre...
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I.M. G. posted an article on The Subprime Shakeout - Jan 5, 2010, 7:34 pm
With lawsuits against servicers grinding a slow path through the court system, investors are looking to make an end-run around the intransigent banks who are refusing to service mortgages in accordance with bondholder wishes. Their solution to break through the gridlock surrounding so-called "toxic"...
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I.M. G. posted an article on The Subprime Shakeout - Jan 5, 2010, 7:34 pm
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