State AGs and Federal Regulators Settlement with Mortgage Servicers

On February 9, U.S. Attorney General Eric Holder, HUD Secretary Shaun Donovan and a coalition of forty-nine state attorneys general announced a $25 billion joint federal-state settlement with Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup, Inc., and Ally Financial, Inc. (formerly GMAC) (the nation’s five largest mortgage servicers, controlling approximately 60% of the mortgage servicing market), related to claims of alleged mortgage abuses and fraud, and an agreement related to standards for mortgage servicing in the future. Click here to read more.

Rating Agency Developments – Week of January 9, 2012

On December 28, S&P updated its methodology for analyzing corporate profitability when determining issuer credit ratings for global corporate issuers. S&P Release.

On December 27, S&P issued an advance notice of criteria change for its methodology for rating second-lien U.S. RMBS transactions. S&P Release.

On December 22, S&P released its outlook assumptions for the U.S. residential mortgage market. S&P Release.

On December 20, S&P updated its project finance construction and operations counterparty methodology. S&P Release.

On December 19, DBRS released its methodology for rating global structured finance CDO restructurings. DBRS Release.

On December 19, DBRS released its unified interest rate model for global structured finance CDO restructurings. DBRS Release.

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Putative Investor Class Action Brought in S.D.N.Y. Against Bank of America Alleging False Statements Relating to Bank of America’s RMBS Exposure

Anchorage Police & Fire Retirement System v. Bank of America Corp., No. 11-2216 (S.D.N.Y. Mar. 30, 2011)

An Alaska retirement fund filed a putative class action complaint against Bank of America and certain of its directors and officers in the Southern District of New York. Plaintiff bring claims under Sections 10(b) and 20(a) of the ’34 Act, alleging that defendants concealed material information and made false and misleading statements relating to Bank of America’s exposure to several forms of risk, including Bank of America’s (1) exposure to faulty mortgages originated by Countrywide; (2) exposure to mortgages upon which it could not legally foreclose; (3) exposure to systemic mortgage servicing problems; and (4) “dollar rolling” practice, through which the company allegedly artificially reduced reported leverage ratios while taking on more risk than it disclosed to the market and federal regulators. Complaint.

UCC Draft Report on Assignment of Morgage Notes

On March 29, the Permanent Editorial Board for the Uniform Commercial Code released a draft report relating to the UCC rules that govern the transfer and endorsement of notes secured by a mortgage on real property. Comments on the draft report must be submitted by May 28. PEB Draft Report.