Full Text of BlackRock, PIMCO Letter to Bank of New York and Bank of America Available

Below, please find the full text of the letter sent by Kathy Patrick and the law firm of Gibbs & Bruns to Bank of New York and BofA/Countrywide on behalf of private label mortgage investors, including BlackRock, PIMCO, MetLife, Freddie Mac and the New York Fed.  This letter represents one of the first formal attempts by a group of bondholders to issue binding instructions to a Trustee to take action on their behalf.

As you read through, keep in mind that the bondholders must identify a specific breach or event of default in order to meet the procedural preconditions to Trustee action and gain standing to sue if the Trustee does not act within 60 day (see recent article on procedural preconditions to bondholder standing).  See if you think Patrick’s allegations regarding Countrywide’s knowledge of breaches of underwriting reps and warranties, based on its modification of loans and its lawsuits with bond insurers, or her allegations regarding Countrywide’s improper maintenance of loan documents, overcharging for maintenance services or failure to notify the Trustee of defects in the loans constitute the specific evidence of breaches necessary to meet her procedural requirements.  Given that she does not identify a single loan by loan number or provide any specific evidence supporting any of her allegations (the closest she comes is citing a press release issued by the FTC), I remain skeptical.

[Many thanks to the folks at Branch Hill Capital for providing me with a copy of this letter – IMG.]
Bondholder Letter to BofNY and BofA Over Countrywide Loans http://d1.scribdassets.com/ScribdViewer.swf?document_id=39838424&access_key=key-9ff9j4kbi9sxm0s3l2u&page=1&viewMode=list

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