Salient Quotes from Complaint
1. This action arises out of Defendants’ conduct in connection with the offer and sale to Plaintiffs of certain residential mortgage-backed securities (“RMBS”). Plaintiffs purchased approximately $46 million in RMBS certificates (the “Certificates”) in connection with three securitizations issued and/or underwritten by Defendants. These three securitizations are commonly known by their abbreviated names, SABR 2005-FR4, SABR 2006-FR1 and SABR 2007-NC2 (collectively, the “Securitizations”). Plaintiffs’ holdings in the Securitizations, including purchase dates and amounts invested, are detailed in Table 1, infra Section I.
3. Through investigation of a large sample of publicly recorded mortgage documents, Plaintiffs have discovered that more than 99% of the mortgages in each of the three Securitizations were improperly or never assigned. In particular, many of these mortgages remain in the name of the loan’s originator or its nominee, and have never been assigned to the Trusts. While others were purportedly assigned to the Trusts, this was long after the securities were issued, contrary to the representations in the Offering Documents. Similarly, the promissory notes were not properly assigned in approximately 81.9% of the sampled loans.
9. By reviewing a large sample of loans in the Securitizations and comparing the representations made about them in the Offering Documents to publicly available data concerning those same loans, Plaintiffs have discovered that the Offering Documents understated CLTV by more than 10 percent in approximately 37% of the loans, based on the sampled loans.
Plaintiffs’ investigation has also revealed that the Offering Documents overstated owner occupancy rates by approximately 14.3% – 19.2%, based on the sampled loans.