Bear Stearns Trust Files Against EMC to Force PSA Compliance

Earlier this week, we reported on an investor suit against Countrywide. While the claims against Countrywide may have reached into new territory, the suit isn’t the only recent example of the mortgage industry breaking ranks and shining a light on the misrepresentations, faulty processes and other flaws in an effort to cover their own investments and point the finger elsewhere.

Daily Finance reported this week on a suit filed earlier this month by Wells Fargo (on behalf of a Bear Stearns Mortgage Funding Trust) against EMC Mortgage Corporation.

The trigger for the suit seems to be that EMC has persistently failed to disclose documents as required by the PSA.   The Trustee claims to have made repeated unsuccessful requests, beginning in January of 2010.  The complaint included an allegation that in August, 2010 the Trustee received a letter from a law firm representing an investor in the Trust, which

…gave notice to the Trustee that Grais had investigated the condition of 1,317 of the 2,049Mortgage Loans held by the Trust, and determined that EMC appeared to have violated its representations and warranties in the MLPA with respect to 938 of those loans.