Repurchases

News & Analysis as of

Fannie Mae Offers Alternative To Repurchase For Mortgage Insurance Rescission, Announces Numerous Other Servicing Policy Updates

On July 1, Fannie Mae issued Servicing Guide Announcement SVC-2014-13, which describes a new alternative to repurchase, an “MI stand-in.” The MI stand-in is defined as the full mortgage insurance (MI) benefit that would have...more

Brevan Howard v. Spanish Broad. Sys., Inc., C.A. No. 9209-VCG (Del. Ch. June 27, 2014) (Glasscock, V.C.)

In this memorandum opinion, the Delaware Court of Chancery denied defendant’s motion to dismiss, finding that plaintiffs had standing and sufficiently pled their breach of contract claim. Defendant, Spanish...more

New York Appellate Division Affirms Denial of Merrill Lynch’s Motion to Dismiss Repurchase Claims

On June 17, New York’s Appellate Division, First Department intermediate appellate court affirmed the denial of Merrill Lynch’s motion to dismiss a repurchase suit brought by two RMBS Trusts. The plaintiff-trusts allege that...more

ACE Files Complaint Re-Asserting Repurchase Claims Dismissed by the First Department

On June 18, trustee HSBC filed suit on behalf of ACE Securities Corp. Home Equity Loan Trust Series 2006-SL2 against DB Structured Products, Inc., a Deutsche Bank Subsidiary, in New York state court. The complaint attempts to...more

EMC Obtains Partial Dismissal of Repurchase Action

On May 29, Justice Eileen Bransten of the New York County Supreme Court denied in part and granted in part defendants’ motion to dismiss a loan repurchase lawsuit brought at the direction of certain certificate holders of...more

Fannie Mae, Freddie Mac Change Representations And Warranties Framework

On May 12, Fannie Mae and Freddie Mac announced numerous changes to the companies’ representations and warranties framework to expand repurchase relief for lenders....more

Strategies for Handling Mortgage Repurchase Demands

Mortgage repurchase demands are par for the course in the world of mortgage lending, but they should not be ignored. Before you act, consider the following strategies for handling mortgage repurchase demands. Mortgage...more

Orrick's Financial Industry Week in Review - April 14, 2014

Agencies Apply Increased Leverage Ratio to Large U.S. Banks - On April 8, the Fed, FDIC and OCC adopted the final rule to increase the leverage ratio for the largest U.S. banks. The final rule applies to U.S. bank...more

Repurchase Suits to Proceed Against DB Structured Products

On March 20, Judge Alison J. Nathan of the United States District Court for the Southern District of New York granted in part and denied in part DB Structured Products, Inc.’s, (DBSP) motions to dismiss four lawsuits brought...more

New York Appellate Court Denies Motion for Reargument of ACE Ruling

On March 20, the Appellate Division, First Department denied an RMBS trustee’s motion for reargument of or, alternatively, leave to appeal to the Court of Appeals (New York’s highest court) from the First Department’s...more

FHFA OIG Recommends Increased Oversight Of Repurchase Late Fees

On February 12, the FHFA Office of Inspector General (OIG) issued a report on the FHFA’s oversight of Fannie Mae’s and Freddie Mac’s handling of aged repurchase demands. The OIG found that (i) the FHFA’s published guidance...more

Delaware Supreme Court: No Duty to Buy Out Minority Shareholders in Closely Held Corporations

The Delaware Supreme Court recently considered whether the directors of a closely held corporation had a duty under common law fiduciary principles to repurchase a minority shareholder’s shares. The court also considered...more

Delaware Supreme Court Holds That a Minority Stockholder Has No Common Law Right to a Conflict-Free Board Decision Regarding the...

In Blaustein v. Lord Baltimore Capital Corp., No. 272, 2013, 2014 Del. LEXIS 30 (Del. Jan. 21, 2014), the Delaware Supreme Court held that a closely-held corporation’s directors owe no fiduciary duty to decide, free from...more

The Ropes Recap: Mergers & Acquisition Law News - Recap of Fourth Quarter 2013

In this issue: *News from the Court: - Guidance from Delaware Chancery Court for Notice Provisions and - Survival Periods - Privileged Pre-Merger Attorney-Client Communications Belong to Surviving...more

RMBS Repurchase Lawsuit Against Nomura Dismissed with Prejudice

On December 24, Justice O. Peter Sherwood of the New York Supreme Court granted with prejudice Nomura Credit & Capital Inc.’s motion to dismiss an RMBS repurchase lawsuit as time-barred. Following the Appellate Division...more

New York Appellate Court Orders Dismissal of Repurchase Claims Against DB Structured Products as Time-Barred

On December 19, the Appellate Division, First Department of the New York Supreme Court held that repurchase claims brought by an RMBS trust against DB Structured Products were barred by the statute of limitations, reversing...more

SEC Amends Rule 5b-3 and Fund Registration Forms to Eliminate References to NRSRO Ratings

The U.S. Securities and Exchange Commission (SEC) recently adopted final amendments to certain rules and forms under the Investment Company Act of 1940 (1940 Act) and the Securities Act of 1933 (1933 Act) to implement a...more

The End Is In Sight? Deutsche Bank Claims Victory In Defense Of A Repurchase Claim Based Upon Statute Of Limitations

A unit of Deutsche Bank won dismissal of a suit brought by mortgage bond investors after a New York state appeals court determined the claims for loan repurchase and indemnity were subject to a six-year statute of limitations...more

New York Appellate Court Resolves Trial Court Split Over Statute Of Limitations For Repurchase Suits

On December 19, the Supreme Court of New York, Appellate Division, held that the statute of limitations on claims related to mortgage repurchase obligations begins to run as of the date of closing of the loan purchase...more

NY Appellate Court Reverses Decision on Statute of Limitations for Mortgage Buyback Claims

On December 19, 2013, correspondent lenders were the beneficiaries of a long-awaited common sense ruling on when the statute of limitations begins to run under New York law for purposes of a mortgage buyback claim. The...more

BofA $1.4 Billion Settlement Talks with Freddie Mac

Bank of America and Freddie Mac are currently attempting to resolve a mortgage repurchase dispute in which Freddie Mac claims that Bank of America should have to buy back more than $1.4 billion in mortgage loans it claims...more

Options to Repurchase Property – A Cautionary Tale on Drafting

A recent Ohio Court of Appeals decision highlights the importance of careful drafting in real estate documents and the need for due diligence in property transactions. Sellers of land sometimes intend to reserve a right to...more

"RMBS Repurchases: When Does the Statute of Limitations Clock Start Running?"

Two recent decisions out of the New York State Commercial Division have introduced uncertainty regarding application of the statute of limitations in residential mortgage-backed securities (RMBS) repurchase actions. The...more

NY Fed to Establish an Overnight Fixed-Rate Reverse Repo Facility Available to Money Market Funds and Others

The New York Fed quietly announced it is testing a “new tool” that would provide a lifeline for yield-starved money market funds. In a speech today at Fordham University, William C. Dudley, president and chief...more

Judge Limits Damages Recoverable On Repurchase Claims

In an opinion refusing to dismiss a lawsuit by several RMBS mortgage trusts in connection with $1.6 billion of mortgage loans, Judge Harold Baer, Jr. of the U.S. District Court for the Southern District of New York, held that...more

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