U.S. Bank as Trustee v Merrill Lynch Mortgage Trust
MERRILL LYNCH MBS TRUST SUES BANK OF AMERICA OVER MBS –> Trustee Lawsuits beginning –> This is an important development in MBS litigation. *U.S. BANK AS TRUSTEE SUES MERRILL LYNCH AND BofA – REPRESENTED BY QUINN EMANUEL (SAME LAYWERS AS FHFA AND MBIA)
Hat tip Manal Mehta
Plaintiffs Merrill Lynch Mortgage Investors Trust, Series 2006-RM4 (“RM4 Trust”) and Merrill Lynch Mortgage Investors Trust, Series 2006-RM5 (“RM5 Trust”, and collectively, the “Trusts”), by U.S. Bank National Association (“U.S. Bank”), not in its individual capacity but solely as current trusteewith respect to the Trusts (the “Trustee”), by its attorneys, Quinn Emanuel Urquhart & Sullivan LLP, for their Complaint against Merrill Lynch Mortgage Lending, Inc. (“Merrill”, the “Sponsor”, or “Merrill Sponsor”), Merrill Lynch Mortgage Investors, Inc. (“Merrill Depositor”), and Bank of America, National Association (“Bank of America”) (all collectively, “Defendants”) allege as follows:
1. In this action, Plaintiffs are two securitization trusts that hold and administer mortgage loans on behalf of investors who own securities collateralized by such loans. Plaintiffs seek to enforce their contractual rights against the parties that orchestrated the securitizations and created the two Trusts, sold defective loans into the Trusts, and have refused to repurchase such loans in violation of the contracts governing the securitizations.
2. In 2006, as a part of its effort to increase its share of the then-highly profitable residential mortgage-backed securities (“RMBS”) market, Merrill bought over 6,000 mortgage loans (“Mortgage Loans”) with original principal balance of over $1.1 billion dollars from a third-party loan originator, ResMAE Mortgage Corporation (“ResMAE”). Through the process of securitization, Merrill turned these mortgages into tradable securities in the form of certificates (“Certificates”). Certificates were issued by the RM4 Trust and the RM5 Trust on September 27, 2006 and October 27, 2006 for the RM4 Trust and RM5 Trust, respectively, and sold to investors, which resulted in over a billion dollars of proceeds to Merrill Depositor. Each Certificate entitles its holder to cash flows from the loan payments on the corresponding mortgages.
3. Merrill accomplished each securitization primarily through three contracts: