The investor clearinghouse that Talcott Franklin, a firm that specializes in securitization remediation, is advising has gained momentum, said litigator Talcott Franklin. In several cases, deals have garnered up to 50% of investor voting rights,
Franklin spoke at a conference on servicing failures hosted today by Grais & Ellsworth.
The firm primarily represents CMBS buyers by and through the special servicer as well as RMBS investors both through individual and collective action.
As part of the legal services to RMBS investors interested in pursuing collective action, the firm has established and maintained the clearinghouse.
"We have 2600 deals where they have 25% or more of the voting rights and 1,150 deals where we 50% or more of the voting rights," he said. "We can do something here."
A major concern behind the "robo-signing " controversy is that in two cases, the courts have sanctioned the holders of note for the attorney fees — in one case, this reached $27,000 — and not the servicer.
"At the clearinghouse, we are pretty disturbed about this trend," he said. Franklin said that the clearinghouse group would be sending out a letter to trustees where they make it clear that no investor endorsed, supported or authorized any representative of the trust to engage in illegal activities, fabricate documents, falsely swear affidavits, abuse the notary process or otherwise mislead or defraud any borrowers courts or public officials.
The letter stated that these activities provide no benefit to investors and could only have been motivated by an effort to increase the trust's profits.
"If you would have told me at the beginning of starting this clearinghouse that we would have ever had to send a letter like this, I never would have believed it," said Franklin. "It is amazing what these banks have attempted to do here."