New Front in MBS Litigation: Pension Funds Claim Ocwen Breached ERISA Duty

I know that there’s an obsessive, ‘My name is Inigo Montoya’ quality to my bringing a claim against mortgage servicers,” Miller said in an email, referring to “The Princess Bride” character who spent half of his life seeking revenge against his father’s killer. “I’m okay with that … The banks recovered and millions of families lost their homes and life’s savings to foreclosures, a great many of which could have been avoided. I hold grudges.”

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New Front in MBS Litigation: Pension Funds Claim Ocwen Breached ERISA Duty

(Reuters) – If there is any silver lining to the lingering black cloud of the mortgage crisis, it’s the incredibly creative legal theories devised by investors who lost hundreds of billions of dollars in overhyped mortgage-backed securities. In a decade of MBS litigation, investors figured out how to hold banks, mortgage issuers and even credit rating agencies accountable for misrepresenting the quality of the mortgages underlying the complex instruments they were peddling. It took ingenuity and persistence, but MBS investors, including hedge funds betting on the eventual success of the litigation, managed to get past contractual and procedural obstacles to recover tens of billions of dollars.

Until yesterday, MBS litigation seemed to be in its final throes. Time has run out for claims based on allegedly deceptive MBS offerings. Investors are still trying to pin MBS trustees with liability for supposedly failing to live up to their obligations once underlying mortgages began to fail, but, as I’ve said many times, the trustee cases appeared to be the last tranche.

That may no longer be true. On Monday, the trustees of a union pension fund that invested in MBS filed a prospective class action against the mortgage servicer Ocwen and related defendants, accusing them of breaching their duties to ERISA beneficiaries. And according to Brad Miller of Guttman Buschner & Brooks – a crusading former North Carolina congressman who is a leading architect of the new suit – mortgage servicers’ exposure to ERISA claims could be vast. The Ocwen suit is apparently the first of its kind, Miller told me in an email, but he is hoping it won’t be the last.

More here…

Copy of the complaint below…

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4closureFraud.org

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Powell vs Ocwen

 

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