Follow up- BOA Settlement & MORE

Posted by kevin on August 13, 2011 under Foreclosure Blog | Comments are off for this article

Previously, we discussed the $8B settlement proposed by Bank of America to certain investors.  The Walnut Group filed papers in Court to block the settlement.  Well, add to the dissenters, the Attorney General of New York, Eric Schneiderman.  This man appears to be a real carnivore.  Not only has he jumped in on the BOA settlement (which may be sell out of investors by the trustee), but he has voiced his opinion that the global settlements proposed by the federal regulators are not strong enough.

What caught my eye was an article in the WSJ where Schneiderman said that he is investigating whether the vast majority of the private securitized trusts are valid.  It has been our contention that many of the mortgage loans sold to securitized trusts from 2003-2007 never made it properly into the trust.  The reason is that the paperwork did not follow the instructions set forth in the pooling and servicing agreements.  The ramifications of a such a finding are huge.  It  means that the trustees do not have standing to sue and, more importantly, the trusts are not REMICS which means that trillions of dollars of taxes could be due State and federal governments.  If that is the case, all I can do is echo the immortal words of the late Warren Zevon, ” send lawyers, guns and money, the s*it has hit the fan!”

We have been adding the “trust failure” arguments to our moving papers for the last six months.  No traction yet with the Judges but we feel that this will be the ultimate battleground on the standing issue in NJ and around the country.  Stay tuned.

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