On January 24, Impac Funding Corp. settled a lawsuit brought by Citigroup Global Markets Inc. alleging violations of Sections 18 and 20 of the Securities Exchange Act and negligent misrepresentation based on alleged misstatements in the Pooling and Servicing Agreement for an RMBS trust. Judge Mariana R. Pfaelzer of the Federal District Court for the Central District of California approved the settlement, which requires Impac to pay Citigroup $3.1 million in cash or securities of Impac Mortgage Holdings. Motion for Approval of Settlement. Order Approving Settlement.
Month: February 2013
Trustee Sues Deutsche Bank Over $89 Million in RMBS Securities
On January 28, HSBC Bank USA, acting in its capacity as Trustee for a single home equity loan trust, filed a complaint in the Supreme Court for the State of New York against DB Structured Products Inc., an affiliate of Deutsche Bank AG. The Trustee alleges that Deutsche Bank breached representations and warranties regarding originator underwriting standards applied to the loans underlying the RMBS, no misrepresentation or fraud in the origination of the loans, and no material defects in the loans. The Trustee asserts causes of action for breach of contract/specific performance, fundamental breach, and declaratory judgment for reimbursable expenses, and seeks rescissory or compensatory damages of $89 million. Complaint.
Rating Agency Developments
On February 1, Fitch updated its methodology for analyzing non-performing loan securitizations. Fitch Report.
On February 1, Fitch updated the public sector liquidity and spread assumption addendum for its covered bonds criteria. Fitch Report.
On January 30, Fitch published criteria for its asset analysis of European public entities’ covered bonds. Fitch Report.
On January 29, Fitch updated its private student loan ABS criteria. Fitch Report.
On January 28, S&P requested comments on its project finance methodology. S&P Release.
Fed Announces Release Dates for Results of Supervisory Stress Tests and CCAR
On January 28, the Fed announced that results from the supervisory stress tests under the Dodd-Frank Act will be released on March 7, and the related results from the Comprehensive Capital Analysis and Review (CCAR) will be released on March 14. The Dodd-Frank Act supervisory stress test results will include data such as capital ratios, revenue and loss estimates under a severely adverse scenario and assuming a common set of capital actions that is used in the analysis of all of the firms. Fed Release.
SEC Extends Exemptions for Security-Based Swaps
On January 29, the SEC amended the expiration dates in its interim final rules that provide exemptions for security-based swaps that, prior to July 16, 2012, were security-based swap agreements and are defined as “securities” under the Securities Act and the Securities Exchange Act due solely to Article VII of the Dodd-Frank Act. Under the amendments, the expiration dates will be extended to February 11, 2014. SEC Rule.