ami press release 10-1-2010

8/8/2019 AMI Press Release 10-1-2010

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For immediate release

Contact: 202-327-8100

Friday, Oct. 1, 2010

AMI Calls on RMBS Trustees to Step Up to

Defend Pension and Retirement Investments

Washington, D.C. – Today, the Association of Mortgage Investors (AMI) called upon residentialmortgage-backed securities (RMBS) trustees to perform their fiduciary responsibilities andprotect millions of American pensioners and retirees, in the wake of reports about seriousirregularities in the processing of legal affidavits by the nation’s largest mortgage servicers.

Recent press reports detail how large mortgage servicers pursuing foreclosure actions havegiven courts inadequate and legally defective affidavits. This deficient approach undermines theintegrity and the operational framework of the housing finance and mortgage system as it existstoday. In all cases where underlying loan files do not have the legal documents required under RMBS pooling and servicing agreements (PSAs), servicers should immediately pursue therepurchase of these loans by party that originated the loans. To the extent that RMBS trustswere damaged by the defective operations of servicers, AMI calls on trustees to audit andreview the resulting losses to hold servicers accountable for negligence in maintaining theassets of trusts. Trustees should publicly state to investors how they are responding to theseproblems and protecting the trusts for which they are responsible.

The reports concerning Ally Financial and JP Morgan Chase allege that key officers of eachinstitution failed to verify critical borrower and property information which may lead to inaccuratelegal filings regarding the mortgages and the underlying properties. In the case of JPMorganChase, 56,000 mortgages in at least 23 states are allegedly impacted. “The capacityconstraints at our nation’s largest servicers continue to be an issue of great concern toinvestors. We urge Ally, JP Morgan Chase, and all other servicers to invest the time andresources necessary to improve their operational infrastructure and to avoid situations whereefficient mortgage servicing and collection practices are compromised. Furthermore, investorsare deeply concerned about possible documentation inconsistencies related to mortgages thatbanks are controlling. It is vital that trustees promptly address these matters,” explained ChrisKatopis, Executive Director of the Association of Mortgage Investors (AMI).

“We hope that servicers who operated in a manner inconsistent with generally acceptedindustry practices, whether intentionally or unintentionally, will do the right thing and immediatelyenforce any violations of representations and warranties in PSAs. The unfortunate and little-known consequence of these operational breakdowns is the destruction of capital needed tosustain fixed income investors reliant upon cash flow from pensions and retirement accounts,”said Katopis.

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The Association of Mortgage Investors represents private investors, public and private pension

funds, and endowments, all of whom support the efforts of Congress and the Administration to

help responsible, though distressed homeowners avoid foreclosure. For more information, visit 

www.the-ami.org.