Investors, including New York Life, have filed a 194-page complaint against Countrywide and Bank of America, alleging…essentially, what homeowners and consumer attorneys have been pointing out all along.
You can read an excellent summary at Mandelman Matters, but this allegation is worth spotlighting again here:
Countrywide routinely failed to comply with the requirements of applicable state laws and the PSAs for valid transfers of the notes and security instruments to the issuing trusts.
In fact, the Plaintiff’s explicitly allege that because of Countrywide’s failure to physically deliver notes and security instruments to the issuing trusts and to execute valid endorsements of the documents at the time of the purported transfer,
The issuing trusts therefore did not possess good title to many of the mortgage loans and lacked legal authority to enforce many of the mortgage loans against the borrowers in case of default.
This is definitely a case to watch, as investors with deep pockets set out to prove, in essence, what homeowners have been asserting for years with mixed success.