Friday, Oct. 1, 2010
Damn the AMI is a little pissed, I'm pretty sure this means that they want the banks to buy back and eat their own crap.
MERS left no paper trail, so I'm going to assume the Banks are in big time trouble.
In all cases where underlying loan files do not have the legal documents required under RMBS pooling and servicing agreements (PSAs), servicers should immediately pursue the repurchase of these loans by party that originated the loans.
Quote:
Washington, D.C. – Today, the Association of Mortgage Investors (AMI) called upon residential mortgage-backed securities (RMBS) trustees to perform their fiduciary responsibilities and protect millions of American pensioners and retirees, in the wake of reports about serious irregularities in the processing of legal affidavits by the nation’s largest mortgage servicers.
Recent press reports detail how large mortgage servicers pursuing foreclosure actions have given courts inadequate and legally defective affidavits. This deficient approach undermines the integrity and the operational framework of the housing finance and mortgage system as it exists today. In all cases where underlying loan files do not have the legal documents required under RMBS pooling and servicing agreements (PSAs), servicers should immediately pursue the repurchase of these loans by party that originated the loans. To the extent that RMBS trusts were damaged by the defective operations of servicers, AMI calls on trustees to audit and review the resulting losses to hold servicers accountable for negligence in maintaining the assets of trusts. Trustees should publicly state to investors how they are responding to these problems and protecting the trusts for which they are responsible.
The reports concerning Ally Financial and JP Morgan Chase allege that key officers of each institution failed to verify critical borrower and property information which may lead to inaccurate legal filings regarding the mortgages and the underlying properties. In the case of JPMorgan Chase, 56,000 mortgages in at least 23 states are allegedly impacted. “The capacity constraints at our nation’s largest servicers continue to be an issue of great concern to investors. We urge Ally, JP Morgan Chase, and all other servicers to invest the time and resources necessary to improve their operational infrastructure and to avoid situations where efficient mortgage servicing and collection practices are compromised. Furthermore, investors are deeply concerned about possible documentation inconsistencies related to mortgages that banks are controlling. It is vital that trustees promptly address these matters,” explained Chris Katopis, Executive Director of the Association of Mortgage Investors (AMI).
“We hope that servicers who operated in a manner inconsistent with generally accepted industry practices, whether intentionally or unintentionally, will do the right thing and immediately enforce any violations of representations and warranties in PSAs. The unfortunate and little-known consequence of these operational breakdowns is the destruction of capital needed to sustain fixed income investors reliant upon cash flow from pensions and retirement accounts,” said Katopis.
