Greenwich v. Countrywide Complaint Now Available

Here is the Complaint brought by Grais & Ellsworth on behalf of hedge fund Greenwich Financial Services against Countrywide Financial Corp., Countrywide Home Loans, Inc. and Countrywide Home Loans Servicing LP (all now part of Bank of America) in the Supreme Court of the State of New York, County of New York (discussed earlier today here). The Complaint alleges two causes of action for declaratory relief, the first seeking a declaration that Countrywide must repurchase any loan on which it agreed to reduce mortgage payments and the second seeking a declaration that Countrywide must purchase those loans at a price not less than 100% of the unpaid principal balance (UPB).

From a legal marketing perspective, it appears that Grais & Ellsworth’s efforts to drum up a challenge to the settlement between attorneys general in 11 states and Countrywide/BofA–by publishing a “white paper” and an open letter on the subject and holding a meeting for prospective plaintiffs (see prior posting here)–were successful.

Interestingly, the provisions of the relevant Pooling and Servicing Agreements (PSAs) appear, from the limited language quoted in the Complaint, to mandate in a fairly straightforward manner that either Countrywide Home Loans (the lender) OR Countrywide Home Loans Servicing (the loan servicer) repurchase the modified loan from the Trust Fund at 100% of the UPB. The fact that the language refers to the “Modified Mortgage Loan” raises the question of whether Countrywide would be required to pay the UPB prior to modification, or the UPB after modification (which could have been reduced considerably by the terms of the workout). Stay tuned…

Greenwich v. Countrywide

This entry was posted in Attorneys General, BofA, Complaints, Countrywide, Greenwich Financial Services, lawsuits, lenders, litigation, loan modifications, repurchase, settlements, William Frey, workouts. Bookmark the permalink.