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  • http://www.blogger.com/profile/06652793884717273418 Bob

    >This ruling is quite important, but not for the reasons stated.If the defendants are relying upon the terms of the PSA as the underpinning of their defense, then plaintiffs should also be able to cite this case as precedent for adhering to the terms of the PSA when prosecuting their claims. I don't mean investor claims necessarily, but rather homeowner claims. I've yet to see a case where the court ruled in favor of a mortgagor/homeowner based on a failure of the securitizing party defendants to adhere to the terms of the PSA. What's good for the goose, is good for the gander.

  • http://Anonymousnoreply@blogger.com Anonymous

    >Bob, the homeowners are not parties or intended beneficiaries of the PSA, so this ruling has no obvious application to homeowner claims.

  • http://Anonymousnoreply@blogger.com Anonymous

    >What if the argument is that a servicer purposely dragged out a foreclosure to maximize fees and profits. That the servicer knew all along that a modification was not feasible for the homeowner. The servicer foreclosed two years too late and during the two year period the servicer collected partial payments from the defaulting homeowner all the while telling the homeowner it could modify, then not modify, modify, then it can't modify. The servicer basically played this game for two years and it knew based on the PSA it would be paid out first (large accumulated profits) and that a modification would never be granted – based on the PSA and the expectations of the investors. In that scenario – would the PSA be relevant and why?

  • http://www.blogger.com/profile/11501168638041947453 Isaac Gradman

    >The servicer has an obligation to service loans in the interests of the bondholders. If the servicer instead purposefully dragged out a foreclosure to maximize fees and profits, knowing that the borrower did not qualify for a modification, the servicer would be liable to the bondholders for damages stemming from its improper servicing. If you read the BlackRock, PIMCO letter sent by Kathy Patrick, you will see that this very issue is identified on page three, Section 3 of the letter, and that Patrick requests that the Master Servicer remedy this breach of servicing obligations. http://subprimeshakeout.blogspot.com/2010/10/full-text-of-blackrock-pimco-letter-to.html

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