Robosigners and Other Servicing Failures: Protecting the Rights of RMBS Investors

So, have you all heard about this conference call yesterday by all the hedge fund investors and the likes to discuss the “robosigning” scandal?
(Presentation Below)

First from the wire…

Grais & Ellsworth LLP Announces Conference and Webcast to Brief Investors on ‘Robo-signers’ and other Servicing Failures

NEW YORK /PRNewswire/ — As the dubious practices of large servicers have brought foreclosures to a halt and triggered investigations by all 50 state Attorneys General, investors in residential mortgage-backed securities are again under threat. Please join us for a briefing on how RMBS investors can protect their rights against the consequences of “robo-signers” and other servicing failures.

From the WSJ

Lifestyles of the Rich & Famous: FauxClosure Edition

Losing your house to foreclosure seemed like a remote possibility for the roughly 125 people meeting Wednesday morning in a nondescript back room at the Core Club in midtown Manhattan.

The private club on East 55th Street touts its “exclusive access to a curated collection of compelling experiences designed around members’ cultural passions,” requires a $50,000 joining fee and costs $15,000 in annual dues. Members include Hollywood producer Harvey Weinstein and leveraged-buyout king Ron Burkle, and the club recently held “a conversation with Cristo,” the famed conceptual artist.

Wednesday’s main event was a conference called “Robosigners and Other Servicing Failures,” hosted by securities lawyer and Core Club member David J. Grais. Mr. Grais is trying to rally investors in residential mortgage-backed securities who feel burned by the foreclosure-paperwork mess — or at least worried that banks will try to pass along the costs of cleaning it up to bondholders.

The Washington Post mentions the meeting as well…

Wells Fargo acknowledges problems in foreclosure paperwork

The problems have not only slowed foreclosures and provoked homeowner lawsuits across the country, they have also stoked an effort by mortgage investors to craft a legal strategy to recoup some of their losses.

Analysts have warned that banks could lose billions of dollars if investors take firms such as Bank of America to court. But attorneys representing money managers warned at a conference in New York on Wednesday that investors who want banks to buy back faulty loans should brace themselves for an ugly legal fight that could last for years.

“None of these avenues of litigation is for either the faint of heart or for those with short attention spans,” David Grais, an attorney representing investors, said at the conference, which focused on allegations that banks have not acted in the best interests of the investors.

The foreclosure debacle has raised questions about whether banks properly handled loans that were sold to investors during the housing boom. Many of those investors are seeking to band together, but with banks vowing to fight lawsuits – and holding the upper hand because they are not sharing detailed loan information that could be used against them in court – attorneys concede that their clients might not see a cent until 2013.

Any uncertainty associated with the lawsuits could also act as a drag on bank stocks, making it harder for the industry to move quickly past the foreclosure controversy.

Nearly 90 money managers and other investors attended Wednesday’s conference, but the list of attendees was closely guarded, with some refusing to give their names when approached. CNBC reported that the guest list included some of the major names in hedge funds and insurance.

In the past, such legal actions against banks have had difficulty gaining traction because investors have been reluctant to collaborate and reveal their mortgage holdings. Bill Frey, chief executive of the fund Greenwich Financial, said they’ve also been wary of antagonizing the banks.

Some of the relationships can be complicated. Merrill Lynch, a wholly owned subsidiary of Bank of America, holds a 34.1 percent interest in the giant hedge fund manager BlackRock. The hedge fund, along with the Federal Reserve Bank of New York and others, sent a letter this month to Bank of America seeking a repurchase of mortgages it said were faulty.

On Wednesday, Tal Franklin, another attorney representing investors, sent a letter to firms handling his clients’ securities, known as trustees, arguing that bondholders should not be responsible for any costs associated with foreclosure paperwork problems. Franklin has organized investors holding more than 6,000 private mortgage-backed securities.

“We don’t want anyone thinking we agreed to this,” Franklin said.

Sounds like a pretty serious meeting…

Looks like a CNBC reporter upset some people at the meeting as well…

Financial Times

The outing of the Robo-Signer conference attendees

Of course, you wouldn’t expect an event like this to go down without a hint of controversy. So here it is — an email from Grais & Ellsworth’s David Grais:

To Those Who Attended our Conference on Robosigners:

I have just learned that CNBC purports to have reviewed a list of those who attended today’s conference. This morning CNBC asked me for a list, and I refused. I told CNBC (as well as other journalists who asked) that we respected the privacy of those who did not want their attendance to be publicized. Apparently, CNBC’s reporter looked over the shoulder of our employee who was receiving our guests and who had a list of those who had registered. I have told CNBC that that reporter is not welcome to return to any conference that we sponsor.

Keeping confidences is our most important obligation. My colleagues and I apologize profusely to those whose attendance at our conference was publicized in this underhanded way.

David Grais

So what is the point of all this you ask?

Well, 4closureFraud was able to get the “handout” from this meeting and has published it below…

Check it out…

Best viewed in full screen…


I sure could use some…


Robosigners and Other Servicing Failures: Protecting the Rights of RMBS Investors
[scribd id=40331194 key=key-jfdcwffuibws1ksswqa mode=list]


4 Responses to “Robosigners and Other Servicing Failures: Protecting the Rights of RMBS Investors”
  1. LemonMeister says:

    Ron Burkle Sucks everything he touches turns to dodo. Just Google Ron Burkle Sucks. this is the product Ron Burkle, Stephen F. Bollenbach, Bruce Karatz, Wendy Marlett, Wendy C. Shiba, Kelly Masuda, Timothy Finchem, Robert L. Johnson, Luis G. Nogales, Timothy W. Finchem, Jeffrey T. Mezger, Kenneth M. Jastrow II, Melissa Lora, Michael G. McCaffery, Leslie Moonves, Glen Barnard, William R. Hollinger, Thomas Norton and John Staines all built as the KB Home Board of Directors. They are posing to ruin more companies and lives. All of them ignore your customer complaints and violate KB Homes 1979 FTC Consent order. The order states KB Must BUY BACK YOUR HOME if your not 100% satisfied. The problem is no one in the Government is making KB Home accountable? Why should you pay taxes if the system is broken.


  2. RAMONA says:

    how can we ever trust any of these large institutions again? If I was everyone i would remove my money from those “TOO BIG TO FAIL ” BANKS., and dare the goverment to catch them when they fall.

  3. Why can’t we merely recast ALL mortgage loans with persons capable of making the payment to current value at current interest (less than 5%) for 30 years, with required novations or whatever may be reasonable and necessary to eliminate ALL of the existing defects of which Robo-signing is merely the tip of the iceberg?

    That would eliminate a vast majority of the foreclosures, keeping residents in their homes, and make a giant step toward stabilizing the major aspect of the economy which is required for us to get moving in the right direction.

  4. MisterKeitel says:

    First off, I LOVE the new word Fauxclosure. I intend to start using it on all my Facebook posts. Second, as I understand it, the banks are getting it from both ends. At the low end there are the individual home owners (or mortage holders) who are starting to fight the phony foreclosures in court. Of course, these are mostly poweless people who cannot afford a lawyer or an extended legal battle. The courts are not really interested in the rights of Little People like you and me. And, the fedgov and the state govs have been slows as mollassis about stepping in and trying to protect the rights of the little guy. Not when big banks have such full treasure chests full of money (our money) to hand out to lobbyists.

    On the high end there are all these super-high-powered investor who are getting mighty itchy wondering if they will get a return on their investments or ever see that money again. they on the other hand, can afford lawyers and are considering right now if it’s a good idea to go to legal war with the banks. I guess these conferences are designed to try and stall the investors.

    It makes me very mad that the rights of the little guy mean very little. In a way, I want the whole corrupt system to come tumbling down just to see the big shots fall and all their money and horded gold suddenly become worthless. Of course, such a Brave New World might be even worse.

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