Lexology-

On April 23, 2012, the plaintiff in State of Ohio ex rel. David P. Joyce, Prosecuting Attorney of Geauga County Ohio v. MERSCORP, Inc., et al., N.D. Ohio Case No. 1:11-cv-02474, filed its motion seeking an order certifying the action as a class action, appointing Geauga County as class representative, and appointing plaintiff’s counsel, the New York law firm of Bernstein Liebhard LLP, as class counsel. The plaintiff argues that the case, which the plaintiff is attempting to bring on behalf of all 88 Ohio counties for relief relating to the allegedly unlawful failure of MERS and its member institutions to record millions of mortgages and mortgage assignments throughout Ohio, meets all requirements of Rule 23(a) and that certification is proper under any one of the 3 subsections of Rule 23(b). The plaintiff hopes to persuade the court that the MERS/member institution policy concerning recordation of mortgages and assignments is a “common scheme or course of conduct” that has given rise to claims “ideally suited for class certification.”

[LEXOLOGY]

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REUTERS LEGAL-

Mortgage-backed securities litigation has been very good for some of the most obscure laws on the books. I’ve already mentioned the starring role the unheralded statute of repose has taken in bank motions to dismiss securities claims by MBS investors, and we all know about Bank of America’s ingenious (or nefarious, depending on your perspective) use of New York’s Article 77 — a proceeding so rarely invoked that the judge assigned the case had to look it up — to seek approval of its proposed $8.5 billion settlement with investors in Countrywide mortgage-backed notes. Today I bring you the Edge Act, a hundred-year-old law that grants federal-court jurisdiction to civil suits against any U.S corporation in which claims arise from international banking or banking transactions in a U.S. territory.

You’re probably wondering what the Edge Act has to do with U.S. MBS trusts in which securities are backed by U.S.-issued mortgages on properties in the United States. Well, it turns out that a handful of the mortgages backing BofA securities actually originated in the Virgin Islands and Guam. We are talking about a very small handful. According to a brief AIG submitted to the 2nd Circuit Court of Appeals, of the 1.7 million mortgages underlying the 349 MBS trusts at issue in AIG’s $10 billion case against Bank of America, exactly 8 mortgages in 3 trusts originated in U.S. territories.

[REUTERS ON THE CASE]

Reuters Legal-

U.S. District Judge Mariana Pfaelzer of federal court in Los Angeles is poised to deliver a ruling in AIG’s mortgage-backed securities case against Countrywide that could have an impact on just about every company headquartered in New York. The issue: How long do N.Y. businesses have to bring fraud claims? Are they entitled to the benefit of the state’s generous six-year statute of limitations? Or, as Countrywide argues in a supplemental motion to dismiss filed on March 23, are companies headquartered in New York instead restricted to the generally stingier time limits in their states of incorporation?

To understand how this question arose in AIG’s MBS case, we have to back up a few steps. It’s no secret that in MBS litigation, there’s no more potent defense than arguments that investors waited too long to file suit. It’s a quick, clean way to excise big chunks of a plaintiff’s case, particularly because federal securities claims, with exceptions for American Pipe tolling (if you don’t know, don’t ask), are generally time-barred after three years under the statute of limitations or the more-obscure-until-MBS-litigation statute of repose. That’s why we’ve seen so many MBS plaintiffs — including AIG and the satellite insurance companies that are also plaintiffs in its Countrywide suit — assert state-law fraud claims in addition to federal securities claims.

[ON THE CASE REUTERS]

by 2012sprint

“What a tangled web we weave, When at first we practice to deceive”

via- anonymous

This is a blockbuster!

Wanna know why? Because it was AIG United Guarantee that was contracted to perform the loan reviews for FNMA to support put-back demands last year and the year before. Wanna know how I know? Because I requested, had lots of one-to-one conversation with the AIG staff and received a fraud investigation from FNMA of my loan origination. And my suspicions were confirmed, thanks to AIG UG investigators, although in FNMA’s view, the ‘mistakes’ discovered were not ‘material’ (to FNMA).

Here’s my point – AIG UG has seen every nook and crannie of the FNMA 2005-2008 cesspool. They don’t want to have anything more to do with it. Ha!

HW-

United Guaranty, the mortgage insurance subsidiary of AIG (AIG: 23.12 -1.78%), said Monday it refuses to accept all of the new HARP refinancing terms based on fears it will end up on the hook for fraudulently written or bad loans.

United Guaranty responded to HousingWire after Bloomberg News said the mortgage insurer refuses to provide blanket waivers on reps and warranties for mortgage lenders trying to get loans through the HARP process. Reps and warrants force originators to buy-back loans that were either poorly or fraudulently underwritten.

[HOUSING WIRE]

Washington, DC—Ranking Member Elijah E. Cummings issued the following statement on a new GAO report issued regarding AIG. The report found inconsistent accounts of attempts by the Federal Reserve Bank of New York to negotiate with AIG’s counterparties to lower U.S. taxpayer exposure.

“GAO’s report cries out for the full and immediate implementation of the Dodd-Frank Act. As distasteful as the AIG bailout was, the systemic risk posed by AIG to the domestic and international economies was real, and cannot be overstated. This report reinforces the need to implement provisions in Dodd-Frank that will prohibit the use of tax-payer dollars to artificially prop up or benefit one firm, and ensure that massive, nonbank companies cannot engage in financial transactions that put our nation’s economy at risk again.”

Cummings was one of the Members of Congress who asked GAO to examine the decision to provide AIG with taxpayer funds. The report echoes the findings of investigations conducted, at Cummings’s request, by the House Oversight and Government Reform Committee and the Special Inspector General for the Troubled Assets Relief Program (SIGTARP) which found clear shortfalls in the Federal Reserve Bank of New York’s negotiations with AIG counterparties regarding the payments they would receive for credit default swap contracts they held.

Highlights of the GAO report include the following:

•        “The possibility of AIG’s failure drove Federal Reserve aid after private financing failed.”
•        “[Federal Reserve Bank of New York’s] Maiden Lane III design likely required greater borrowing, and accounts of attempts to gain concessions from AIG counterparties are inconsistent.”

•        “The Federal Reserve’s actions were generally consistent with existing laws and policies, but they raised a number of questions.”
•        “Initial Federal Reserve lending terms were designed to be more onerous than private sector financing.”
•        “The AIG crisis offers lessons that could improve ongoing regulation and responses to future crises.”

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IN THE COURT OF COMMON PLEAS
GEAUGA COUNTY, OHIO

STATE OF OHIO, ex.rel.
DAVID P. JOYCE
PROSECUTING ATTORNEY OF GEAUGA
COUNTY, OHIO
Courthouse Annex, 231 Main St. Suite 3A
Chardon, Ohio 44024

On behalf of Geauga County and all others similarly
situated,

Plaintiff,

v.

MERSCORP, INC.
1818 Library Street, Suite 300
Reston, Virginia 20190

and

MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.
1818 Library Street, Suite 300
Reston, Virginia 20190

[...]

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Thomson Reuters News & Insight-

When New York attorney general Eric Schneiderman sued Bank of New York Mellon in August, the AG asserted that the Countrywide mortgage-backed securitization trustee had breached its duty to MBS investors. “As trustee, BNYM owed and owes a fiduciary duty of undivided loyalty,” said the AG’s suit, which was filed as a counterclaim in BNY Mellon’s case seeking approval of the proposed $8.5 billion Bank of America settlement with MBS investors. “[BNYM] breached that duty to [investors'] detriment and disadvantage, by failing to notify them of issues regarding the quality of loans underlying their securities.”

But according to BNY Mellon, it had no such duty.

The bank’s lawyers at Mayer Brown and Dechert filed a 14-page brief this week outlining its interpretation of the responsibilities of an MBS securitization trustee. The filing came at the direction of Manhattan federal Judge William Pauley, who’s deciding whether the BofA MBS settlement should be heard in state court, where BNY Mellon filed it, or in federal court, where key objectors to the proposed settlement want it to proceed. Pauley was concerned with the “securities exception” to the Class Action Fairness Act, which could end up guiding his decision on the forum question. For BNY Mellon, however, any discussion of its trustee responsibilities is fraught with danger. It’s already facing the New York AG’s claims, and several other state attorneys general have threatened similar actions. MBS investors, meanwhile, are pushing BNY Mellon (and other securitization trustees) to bring put-back claims, with the implied threat that investors will take action against trustees unless they do.

[Thomson Reuters News & Insight]

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On September 23, 2011, Robbins Geller Rudman & Dowd LLP filed a complaint alleging violations of the federal securities laws by Bank of America Corporation and certain of its officers and/or directors. The class action was commenced in the United States District Court for the Southern District of New York on behalf of purchasers of BofA securities between February 25, 2011 and August 5, 2011 (the “Class Period”).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/bofaaig/ . Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges BofA and certain of its officers and directors with violations of the Securities Exchange Act of 1934. BofA is one of the largest financial institutions in the world.

The complaint alleges that during the Class Period, defendants misled investors by failing to disclose that BofA potentially owes American International Group, Inc. (“AIG”) over $10 billion. Specifically, defendants’ statements during the Class Period were materially false and misleading for failing to disclose that between 2005 and 2007, BofA and two companies that BofA acquired — Merrill Lynch & Co., Inc. (“Merrill Lynch”) and Countrywide Financial Corporation (“Countrywide”) — and their subsidiaries sold AIG over $28 billion in residential mortgage-backed securities (“RMBS”), and that as a result of these sales, AIG suffered losses in excess of $10 billion and BofA was potentially subject to suit for those losses. Throughout the Class Period, defendants repeatedly informed investors about the claims of other entities for their RMBS losses but not about the massive losses suffered by AIG.

[MARKETWATCH]

Abigail C. Field-

The $8.5 billion settlement that Bank of New York and Bank of America hope will resolve all (or almost all) mortgage backed securities claims between them has faced a lot of opposition. The attorneys general of New York and Delaware oppose the deal, as do various investors not involved in the deal negotiations. Now a new, completely different type of opposition has surfaced: homeowners whose loans are funding the securities involved in the BNY-BofA settlement.

On Tuesday, four homeowners whose loans were securitized into trusts in the settlement both sued to block the settlement in federal court and asked the New York State Court judge weighing the settlement for permission to intervene on behalf of all the borrowers whose loans are in the trusts and give the court their perspective on the BNY-BofA settlement.

Homeowners Sue to Stop the $8.5 Billion BofA-BoNY Settlement

…

[REALITY CHECK]

Hagens Berman Sobol Shapiro LLP today announced that it is investigating concerns by hedge funds and institutional investors who believe Bank of America Corp. (NYSE: BAC) may have failed to disclose to investors the risk associated with a $10 billion lawsuit threat from American International Group (“AIG”) (NYSE: AIG).

According to reports, AIG invested in billions of dollars of mortgage-backed securities sold by Bank of America prior to the housing collapse. In January 2011, after analyzing data from hundreds of thousands of loans, AIG reportedly informed the bank that it felt the risk of the securities had been misrepresented and was prepared to sue the banking giant for more than $10 billion.

Hagens Berman is investigating whether Bank of America failed to disclose fully the risks of its dispute with AIG. According to media reports, the bank did not mention the threat of the lawsuit in its quarterly regulatory filing, which was issued four days before AIG’s lawsuit was filed.

“We believe that Bank of America knew, or should have known, that its dispute with AIG represented a significant risk for investors,” said Partner Reed R. Kathrein, who is leading the firm’s investigation from its San Francisco office. “If the company did indeed fail to disclose such a risk, it could represent a major breach of the securities laws.”

On August 8, 2011, after several months of negotiations, AIG filed its lawsuit. Bank of America shares fell sharply, losing 20 percent of their value.

Institutional investors and others who purchased Bank of America common stock between May 5, 2011 and August 8, 2011, and who have losses exceeding $1,000,000 as a result of BAC’s stock drop on August 8, 2011, are encouraged to contact the firm. Reed R. Kathrein can be reached at (206) 623-7292 or via email at CCME@hbsslaw.com. Investors can also learn more about this investigation at www.hbsslaw.com/BACsecurities.

(Reuters) –

Top Bank of America Corp lawyers knew as early as January that American International Group Inc was prepared to sue the bank for more than $10 billion, seven months before the lawsuit was filed, according to sources familiar with the matter.

Bank of America shares fell more than 20 percent on August 8, the day the lawsuit was filed, adding to worries about the stability of the largest U.S. bank. It wasn’t until Warren Buffett stepped up with a $5 billion investment that those fears were eased, though hardly eliminated.

[REUTERS]

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

AMERICAN INTERNATIONAL GROUP,
INC., AIG SECURITIES LENDING
CORPORATION, AMERICAN
GENERAL ASSURANCE COMPANY,
AMERICAN GENERAL LIFE AND
ACCIDENT INSURANCE COMPANY,
AMERICAN GENERAL LIFE
INSURANCE COMPANY, AMERICAN
GENERAL LIFE INSURANCE
COMPANY OF DELAWARE,
AMERICAN HOME ASSURANCE
COMPANY, AMERICAN
INTERNATIONAL GROUP
RETIREMENT PLAN, CHARTIS
PROPERTY CASUALTY COMPANY,
CHARTIS SELECT INSURANCE
COMPANY, CHARTIS SPECIALTY
INSURANCE COMPANY, COMMERCE
AND INDUSTRY INSURANCE
COMPANY, FIRST SUNAMERICA LIFE
INSURANCE COMPANY, LEXINGTON
INSURANCE COMPANY, NATIONAL
UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, NEW
HAMPSHIRE INSURANCE COMPANY,
SUNAMERICA ANNUITY AND LIFE
ASSURANCE COMPANY,
SUNAMERICA LIFE INSURANCE
COMPANY, THE INSURANCE
COMPANY OF THE STATE OF
PENNSYLVANIA, THE UNITED STATES
LIFE INSURANCE COMPANY IN THE
CITY OF NEW YORK, THE VARIABLE
ANNUITY LIFE INSURANCE
COMPANY, and WESTERN NATIONAL
LIFE INSURANCE COMPANY,

Plaintiffs,


against-

BANK OF AMERICA CORPORATION,
BANC OF AMERICA SECURITIES LLC,
BANK OF AMERICA, NATIONAL
ASSOCIATION, BANC OF AMERICA
FUNDING CORPORATION, BANC OF
AMERICA MORTGAGE SECURITIES,
INC., ASSET BACKED FUNDING
CORPORATION, NB HOLDINGS
CORPORATION, MERRILL LYNCH &
CO., INC., MERRILL LYNCH
MORTGAGE LENDING, INC., FIRST
FRANKLIN FINANCIAL
CORPORATION, MERRILL LYNCH
MORTGAGE CAPITAL INC., MERRILL
LYNCH CREDIT CORPORATION,
MERRILL LYNCH, PIERCE, FENNER &
SMITH INC., MERRILL LYNCH
MORTGAGE INVESTORS, INC.,
COUNTRYWIDE FINANCIAL
CORPORATION, COUNTRYWIDE
CAPITAL MARKETS LLC,
COUNTRYWIDE HOME LOANS, INC.,
COUNTRYWIDE SECURITIES
CORPORATION, CWABS, INC.,
CWALT, INC., CWHEQ, INC., and
CWMBS, INC.,

Defendants.

via: ZeroHedge

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