Houston based law firm Gibbs & Bruns LLP said its clients -- holders of over $26 Billion of Countrywide-issued Residential Mortgage Backed Securities (RMBS) -- are opening an investigation of ineligible mortgages in Countrywide-issued RMBS.
Under the terms of the applicable Pooling and Servicing Agreements (PSAs), the holders (the clients represented by Gibbs & Burns LLP) of over 25% of the Voting Rights of the RMBS have the power to issue binding instructions to the Trustee -- in this case the Bank of New York.
Gibbs & Burns said its clients have issued a request to Bank of New York to investigate ineligible mortgages and to demand repurchase of mortgages that did not conform to the required representations and warranties at the time they were used as collateral for RMBS. The holders issued their instruction letter after they met with senior representatives of Bank of New York, and its counsel, on August 2.
“We believe our clients’ instruction, and the terms of the applicable PSAs, require the Trustee to take action on each of these transactions,” said Gibbs & Bruns LLP partner, Kathy Patrick, who is lead counsel for the holders’ group. “Our clients will pursue all contractual remedies available to them in these and the many other Countrywide RMBS deals where they have instructed us to take action to protect their rights and recover their losses.”