wash fed v countrywide
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COMPLAINT 1
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
David A. Nold, WSBA #19009Thomas W. Stone, WSBA #37559NOLD MUCHINSKY PLLC10500 NE 8th St., Ste. 930Bellevue, Washington 98004
Phone: (425) 289-5555Attorneys for Plaintiff Washington Federal
UNITED STATES DISTRICT COURTWESTERN DISTRICT OF WASHINGTON AT SEATTLE
WASHINGTON FEDERAL, a federally
chartered savings association,
Plaintiff,
vs.
COUNTRYWIDE HOME LOANS, INC.(d/b/a BANK OF AMERICA HOMELOANS), BANK OF AMERICACORPORATION, BANK OF AMERICA,N.A.,
Defendants.
NO.
COMPLAINT FORBREACH OF CONTRACT ANDJURY DEMAND
Washington Federal (Washington Federal) brings this action against Countrywide
Home Loans, Inc. (Countrywide), d/b/a Bank of America Home Loans, and against Bank of
America, N.A. (Bank of America), and Bank of America Corporation (BAC) and alleges as
follows:
I. NATURE OF ACTION1.1 This is an action for declaratory relief and breach of contract stemming from
numerous breaches of the Mortgage Loan Purchase and Servicing Agreement (MLPSA) and
related transactional documents associated with Washington Federals purchase from
Countrywide of 10 pools of mortgage loans (collectively the Transaction Documents). This is
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COMPLAINT 2
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
also an action for breach of the Defendants servicing obligations contained in the MLPSA. A
copy of the MLPSA is attached hereto as Exhibit A. A copy of the Transaction Documents
associated with the first pool of loans purchased is attached hereto as Exhibit B. The Transaction
Documents related to subsequent loan pool transactions are substantially similar to those in
Exhibit B.
1.2 Over a period of approximately three years, Washington Federal purchased 1,046
loans (individually, a Loan and collectively, the Loans) with an initial aggregate balance of
approximately $400 million from Countrywide. The MLPSA and Transaction Documents
include specific representations and warranties by Countrywide regarding the Loans, including,
inter alia, that the Loans complied with specific underwriting guidelines, that its origination
practices were legal, prudent and customary in the industry, that the notes and mortgages or
deeds of trust (collectively Mortgages) were not subject to any defenses or set offs and were
enforceable in accordance with their terms, that Countrywide was the sole owner and holder of
the Loans, and that the Loans conformed to the parameters specified in the MLPSA and
Transaction Documents. Countrywides representations and warranties are described in more
detail below.
1.3 The MLPSA provides that Countrywides representations and warranties survive
the sale of the Loans to Washington Federal, and inure to the benefit of Washington Federal
notwithstanding any restrictive or qualified endorsement on any mortgage note or assignment or
Washington Federals examination or failure to examine any collateral documents or credit files.
1.4 In addition, the MLPSA obligates Countrywide to notify Washington Federal if it
discovers any breach of a representation or warranty and to cure such breach within 90 days of
notice. If Countrywide cannot cure the breach, it must repurchase the Loan(s) to which the
breach relates at a price provided in the MLPSA.
1.5 The MLPSA further provides that Countrywide is to service and administer
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COMPLAINT 3
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
Mortgage Loans sold . . . in accordance with the terms of [the MLPSA]. In exchange for that
servicing, Countrywide receives a servicing fee equal to 0.25% of the unpaid principal balance of
the Loans. In the MLPSA, Countrywide agreed to employ procedures in accordance with the
customary and usual standards of practice of prudent mortgage servicers. The MLPSA
obligated Countrywide to, inter alia:
1.5.1 [M]ake reasonable efforts, in accordance with customary and usual
standards of practice of prudent mortgage servicers, to collect all payments due under each
Mortgage Loan . . . (Section 4.02);
1.5.2 [U]se reasonable efforts to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for collection of
delinquent payments; (Section 4.03(a)).
1.5.3 [U]se reasonable efforts to realize upon defaulted Mortgage Loans, in
such manner as will maximize the receipt of principal and interest by [Washington Federal],
taking into account, among other things, the timing of foreclosure proceedings. (Section
4.03(a));
1.5.4 [M]anage, conserve, protect and operate each REO Property in the same
manner that it manages, conserves, protects and operates other foreclosed property for its own
account; (Section 4.13(b)); and to
1.5.5 [U]se reasonable efforts to dispose of each REO Property as soon as
possible and . . . sell each REO Property no later than one (1) year after title to such REO
Property has been obtained, unless Countrywide determines, and gives an appropriate notice to
[Washington Federal], that a longer period is necessary for the orderly disposition of any REO
Property. (Section 4.13(c)).
1.6 In 2008 the Bank of America Defendants acquired Countrywide and assumed
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COMPLAINT 4
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Nold Muchinsky PLLCBellevue Place, Suite 930
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425.289.5555 FAX425.289.6666
Countrywides obligations under the MLPSA. The Bank of America Defendants are successors
and assigns under the MLPSA.
1.7 Countrywide breached at least one representation or warranty contained in the
MLPSA and/or the Transaction Documents materially and adversely affecting the value of the
Mortgage Loan with respect to a very high percentage of the Loans.
1.8 The pervasiveness and severity of the breaches of the various representations
and warranties contained in the Transaction Documents amount to a material and substantial
breach, which go TO the heart of the MLPSA governing all loan pool purchases.
1.9 Defendants have also breached their promises to service the Loans in accordance
with the requirements of the MLPSA. For example:
1.9.1 Defendants have not used reasonable care to notify Washington Federal of
defaults on a timely basis or of defects in the Loan documentation and underwriting;
1.9.2 Defendants have unreasonably delayed foreclosure proceedings by
requiring or counseling borrowers to seek to modify the terms of their Loans under programs in
which Washington Federal does not participate;
1.9.3 Defendants have failed to seek on a timely basis direction from
Washington Federal as required by the MLPSA and/or have failed to follow Washington
Federals directions as required by the MLPSA;
1.9.4 Defendants have not used reasonable diligence in seeking relief from
automatic stays in bankruptcy;
1.9.5 Defendants have not taken reasonable measures to protect the value of
Washington Federals collateral by taking control of abandoned properties or evicting persons in
unlawful possession;
1.9.6 Defendants have incurred excess servicing and collection costs, including
tax penalties, forced place insurance and other unreasonable insurance charges, and unnecessary
and unreasonably high legal fees and related expenses. As a result of these breaches,
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COMPLAINT 5
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
Washington Federal has been damaged in the amounts of unearned servicing fees paid to date
and in the loss of market value of its collateral and the value of its Loans.
II. PARTIES2.1 Washington Federal is a federally chartered savings association with
its principal place of business and home office in Seattle, Washington. In July 2011, Washington
Federal shortened its name from Washington Federal Savings & Loan Association, which is the
name appearing on the MLPSA and Transaction Documents.
2.2 Countrywide is a New York corporation with its principal place of business in
Calabasas, California. Countrywide was the seller of the various loan pools and a party to the
MLPSA and Transaction Documents.
2.3 BAC is a Delaware corporation with its principal place of business in Charlotte,
North Carolina and offices throughout the State of Washington, including in Seattle,
Washington.
2.4 Bank of America, NA is a national banking association with its designated main
office in Charlotte, North Carolina. It is a wholly-owned subsidiary of BAC.
III. JURISDICTION AND VENUE
3.1 This Court has subject matter jurisdiction over this proceeding pursuant to 28
U.S.C. 1332(a), as the Plaintiff is a citizen of the State of Washington, the Defendants are all
citizens of states other than Washington, and the amount in controversy exceeds $75,000.
3.2 Venue is proper in this Court because the Defendants transact business in this
state, have offices in this state and this is the state where the relevant agreements were entered
into.
IV. ADDITIONAL ALLEGATIONS
4.1 On or about December 30, 2004, Washington Federal contracted to purchase 30-
year fixed rate jumbo mortgage Loans from Countrywide. Groups of mortgage Loans (pools)
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COMPLAINT 6
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
were purchased in a series of ten transactions between December 30, 2004 and September 29,
2006.
4.2 A single master Mortgage Loan Purchase and Servicing Agreement
(MLPSA), dated December 30, 2004 governed all of the Loan pool purchase transactions. In
addition, various Transaction Documents applied to each specific Loan pool purchase and sale
transaction. These Transaction Documents included for each pool: (a) a Trade Confirmation,
which confirmed the proposed terms of a prospective purchase of a specific mortgage pool; (b) a
Purchase Confirmation, which set forth the terms of a purchase of a specific mortgage pool;
and (c) a Mortgage Loan Schedule, which described the attributes of the purchased Loans.
Collectively, these documents are referred to as the Transaction Documents.
A. Representations and Warranties Regarding Origination and Underwriting.
4.3 In the MLPSA Countrywide set out numerous specific representations and
warranties concerning the origination and underwriting of the Loans it was selling to Washington
Federal. These included, inter alia, representations and warranties that as of the date of the Loan
sale:
4.3.1 The information contained in the Mortgage Loan Schedule was complete, true
and correct in all material respects. MLPSA 3.02(a).
4.3.2 There were no outstanding charges affecting the mortgaged property.
MLPSA 3.02(c).
4.3.3 The Mortgage Note and the Mortgage were not subject to any right of
rescission, set-off, counterclaim or defense. MLPSA 3.02(e).
4.3.4 All buildings on the mortgaged property were insured against loss by fire and
hazards as are customary in the area where the mortgaged property was located. MLPSA
3.02(f).
4.3.5 Each Loan at the time of origination complied in all material respects
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COMPLAINT 7
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
with applicable state law and federal laws including truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity and disclosure laws applicable
to the Loan. MLPSA 3.02(g).
4.3.6 The Mortgage Note and the related Mortgage were genuine and each was the
legal, valid and binding obligation of the maker thereof, enforceable in accordance with its
terms. MLPSA 3.02(i).
4.3.7 The Mortgage was a valid, existing and enforceable first or second lien (as
specified in the related Mortgage Loan Schedule) on the Mortgaged Property. MLPSA 3.02(j).
4.3.8 Countrywide was the sole owner and holder of the Loan. Countrywide has
good and marketable title thereto, and has full right to transfer and sell the Loan to Washington
Federal free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest
not specifically set forth in the related Mortgage Loan Schedule and has full right and authority
subject to no interest or participation of, or agreement with, any other party, to sell and assign
each Mortgage Loan pursuant to the terms of the MLPSA. MLPSA 3.02(l).
4.3.9 The origination and collection practices used by Countrywide with respect to
each Mortgage Note and Mortgage has been in all respects legal, proper, prudent and customary
in the mortgage origination and servicing business. MLPSA 3.02(p).
4.3.10 Unless the Loan was underwritten pursuant to one of Countrywides
streamline documentation programs, the Credit File contained an appraisal of the related
Mortgaged Property signed prior to the approval of the Loan application by an appraiser who (a)
possessed the minimum requisite qualifications of Fannie Mae or Freddie Mac, (b) was duly
appointed by the originator that had no interest, direct or indirect in the Mortgaged Property, and
(c) whose compensation was not affected by the approval or disapproval of the Loan. MLPSA
3.02(f).
4.4 Additional representations and warranties were included in the Transaction
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COMPLAINT 8
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425.289.5555 FAX425.289.6666
Documents. These included representations and warranties that, inter alia, only 30-year fixed
rate Jumbo mortgages were included in the pools and representations concerning the parameters
of the specific Loans that were included in the respective pools, including loan-to-value ratio,
cumulative loan-to-value ratio, FICO credit scores of borrowers, and whether Loans were full
documentation or reduced documentation Loans.
4.5 These representations and warranties were material to Washington Federal
when it purchased the mortgage Loans. Countrywide promised that its Loans met certain credit
quality thresholds that indicated that borrowers would be able to repay their Loans on time and in
full, that the Loans were originated in accordance with legal requirements and industry
standards. Without these representations and warranties, the Loans would have represented a
much higher default risk and Washington Federal would not have purchased the Loans.
B. Countrywides Breaches of the Representations and Warranties Regarding
Origination.
4.6 Bank of America provided Washington Federal with what it represented were the
complete Loan files relating to a selected sample of Loans sold to Washington Federal. A
review of the sample of mortgage loan files has revealed breaches of numerous representations
and warranties including, inter alia:
4.6.1 Loans that were listed as Full Doc, on the Mortgage Loan Schedule but
which lacked standard income verification documentation.
4.6.2 Loans that were made at an interest rate differing from that listed on the
Mortgage Loan Schedule.
4.6.3 Loans that were not jumbo loans, as represented in the Transaction
Documents.
4.6.4 Mortgage notes with facial deficiencies such as lack of proper
endorsement, making Countrywides status as a holder questionable and giving rise to defenses.
4.6.5 Loans underwritten outside prudent and customary origination standards
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COMPLAINT 9
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in the industry, e.g., Loans approved with cash out without any tax returns or other income
verification documentation where the borrower was self-employed and had a history of
delinquencies and judgments.
4.6.6 Incomplete loan files lacking deeds, notes or evidence of property hazard
insurance.
4.6.7 Loan-to-value and cumulative loan-to-value ratios in excess of those
represented on the Mortgage Loan Schedules.
4.6.8 Loans originated outside the parameters of the applicable underwriting
guidelines, e.g., loans with excessive debt-to-income ratio, insufficient credit scores, and
insufficient employment, income or asset verification.
4.7 Specifically, the following breaches of specific representations and warranties
were found:
4.7.1 With respect to loan #100674715 in pool 3:
4.7.1.1 There was no evidence of a Certificate of Insurance
covering the unit, borrower or lender. This was a breach of the representation and warranty
contained in section 3.02(f) (All buildings upon the Mortgaged Property were insured by an
insurer acceptable to an Agency against loss by fire, hazards of extended coverage and insurer
was licensed to do business in the state where the Mortgaged Property is located. All such
insurance policies contain a standard mortgagee clause naming Countrywide, its successors and
assigns as mortgagee, and all premiums thereon have been paid.).
4.7.1.2 The loan balance was $200,000, which was below Fannie
Mae and Freddie Mac loan limits. This was a breach of the representation and warranty
contained in the Purchase Confirmation dated August 31, 2005, which stated that, [e]ach
Mortgage Loan was a jumbo Mortgage Loan . . . .
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COMPLAINT 10
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.2 With respect to loan #102031342 in pool 3:
4.7.2.1 The loan balance is $116,700, which was below Fannie
Mae and Freddie Mac loan limits. This was a breach of the representations and warranties
contained in the Purchase Confirmation dated August 31, 2005, which stated that, [e]ach
Mortgage Loan is a jumbo Mortgage Loan . . . .
4.7.2.2 The CLTV for this loan was 100%. Applicable
underwriting guidelines provided that for this type of loan the maximum CLTV was 95%. This
was a breach of the representation and warranty contained in the Purchase Confirmation dated
August 31, 2005, which stated that, [e]ach Mortgage Loan conforms to the jumbo underwriting
guidelines of the prior owner of the Mortgage Loan or Countrywide's jumbo credit underwriting
guidelines, as applicable, in effect at the time of origination.
4.7.3 With respect to loan #102031670 in pool 3:
4.7.3.1 The loan balance was $78,400, which was below Freddie
Mac and Fannie Mae limits. This was a breach of the representation and warranty contained in
the Purchase Confirmation dated August 31, 2005, which states that, [e]ach Mortgage Loan is a
jumbo Mortgage Loan . . . .
4.7.3.2 The CLTV for this loan was 100%. Applicable
underwriting guidelines provided that for this type of loan the maximum CLTV was 95%. This
was a breach of the representation and warranty contained in the Purchase Confirmation dated
August 31, 2005, which stated that, [e]ach Mortgage Loan conforms to the jumbo underwriting
guidelines of the prior owner of the Mortgage Loan or Countrywide's jumbo credit underwriting
guidelines, as applicable, in effect at the time of origination.
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COMPLAINT 11
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.4 With respect to loan # 102522464 in pool 3:
4.7.4.1 There was no title policy in the loan file. This was a breach
of the representations and warranties contained in section 3.02(m) (Each Mortgage Loan
secured by (i) a first priority Mortgage, is covered by a lender's title insurance policy acceptable
to an Agency, issued by a title insurer acceptable to an Agency and qualified to do business in
the jurisdiction where the related Mortgaged Property is located, insuring (subject to the
exceptions contained in Section 3.02(j)(i), (ii) and (iii) above) Countrywide, its successors and
assigns as to the first or second priority lien of the Mortgage, as applicable.).
4.7.4.2 The loan balance was $102,650, which was below Fannie
Mae and Freddie Mac limits. This was a breach of the representation and warranty contained in
the Purchase Confirmation dated August 31, 2005, which stated that, [e]ach Mortgage Loan is a
jumbo Mortgage Loan . . . .
4.7.4.3 The loan officer did not sign the final loan application.
Proper, prudent and customary origination practices require the loan officer to sign the final loan
application. This was a breach of the representation and warranty contained in section 3.02(p)
(The origination and collection practices used by Countrywide with respect to each Mortgage
Note and Mortgage have been in all respects legal, proper, prudent and customary in the
mortgage origination and servicing business. . . .).
4.7.4.4 Applicable underwriting guidelines provide that the
maximum LTV/CLTV was 80/100% for a reduced doc loan with a 700 credit score. This
borrower had a 662 credit score and the CLTV was 99.989%. This was a breach of the
representation and warranty contained in the Purchase Confirmation dated August 31, 2005,
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COMPLAINT 12
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which stated that, [e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the
prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as
applicable, in effect at the time of origination.
4.7.4.5 The applicable underwriting guidelines provided that the
maximum debt-to-income ratio for a reduced doc loan was 45%. The debt-to-income ratio was
49.484%. This was a breach of the representation and warranty contained in the Purchase
Confirmation dated August 31, 2005, which stated that, [e]ach Mortgage Loan conforms to the
jumbo underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's
jumbo credit underwriting guidelines, as applicable, in effect at the time of origination.
4.7.5 With respect to loan #103179593 in pool 4:
4.7.5.1 The mortgagee clause in the title insurance policy indicated
the broker's rather than Countrywides name and does not state, "its successors and or assigns."
This was a breach of the representation and warranty contained in section 3.02(f) (All buildings
upon the Mortgaged Property are insured by an insurer acceptable to an Agency against loss by
fire, hazards of extended coverage and insurer is licensed to do business in the state where the
Mortgaged Property is located. All such policies contain a standard mortgagee clause naming
Countrywide, its successors and or assigns as mortgagee . . . .).
4.7.5.2 The signature affidavit was missing the notary's seal and
date and the deed was missing the notary's seal. Proper, prudent and customary origination
practices require the Signature Affidavit and Deed to be properly notarized. This was a breach
of the representation and warranty contained in section 3.02(p) (The origination and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in
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COMPLAINT 13
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all respects legal, proper, prudent and customary in the mortgage origination and servicing
business . . . .).
4.7.6 With respect to loan #103541533 in pool 3:
4.7.6.1 The application signature page was not in the file, and the
name affidavit was not notarized. Proper, prudent and customary origination practices require
the final loan application to be signed and dated by the borrower and loan officer; and the name
affidavit notarized. This was a breach of the representation and warranty contained in section
3.02(p) (The origination and collection practices used by Countrywide with respect to each
Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in
the mortgage origination and servicing business . . . .).
4.7.6.2 The borrowers debt-to-income ratio was 48.171%.
Countrywide guidelines provide that the maximum debt-to-income ratio for an 80% LTV
Full/Alt loan was 40%. This was a breach of the representation and warranty contained in the
Purchase Confirmation dated August 31, 2005, which stated that, [e]ach Mortgage Loan
conforms to the jumbo underwriting guidelines of the prior owner of the Mortgage Loans or
Countrywide's jumbo credit underwriting guidelines, as applicable, in effect at the time of
origination.
4.7.7 With respect to loan #103546694 in pool 7:
4.7.7.1 At the time of closing the subordination agreement for the
borrower's second Deed of Trust had not been recorded. There was no subordination agreement
in the file. This was a breach of the representation and warranty contained in section 3.02(j)
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COMPLAINT 14
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(The Mortgage is a valid, existing and enforceable first or second lien (as specified in the
related Mortgage Loan Schedule) on the Mortgaged Property . . . .).
4.7.7.2 The mortgagee clause in the insurance policy indicated
Countrywide's name, but did not state, "its successors and or assigns", and the loan number was
missing. This was a breach of the representation and warranty contained in section 3.02(f) (All
buildings upon the Mortgaged Property are insured by an insurer acceptable to an Agency
against loss by fire, hazards of extended coverage and insurer is licensed to do business in the
state where the Mortgaged Property is located. All such policies contain a standard mortgagee
clause naming Countrywide, its successors and or assigns as mortgagee . . . .).
4.7.8 With respect to loan #104794086 in pool 5:
4.7.8.1 There was no assignment of mortgage in the file. This was
a breach of the representation and warranty contained in section 3.02(x) (Except for the absence
of recording information, the Assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is located.).
4.7.9 With respect to loan #106652597 in pool 9:
4.7.9.1 The Note was not endorsed in blank or to Countrywide.
This was a breach of the representations and warranties contained in section 3.02(e) (The
Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim
or defense . . . .) and section 3.02(l) (Countrywide is the sole owner and holder of the
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and Countrywide has good and
marketable title thereto, and has full right to transfer and sell the Mortgage Loan to the Purchaser
free and clear . . . .)
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COMPLAINT 15
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.9.2 There was no assignment of mortgage in the file. This was
a breach of the representation and warranty contained in section 3.02(x) (Except for the absence
of recording information, the Assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is located.)
4.7.9.3 The loan officer did not sign the final loan application. The
address on the loan documents and insurance binder does not match the address on the appraisal
and title report. Proper, prudent and customary origination practices required the final loan
application to be signed and dated by the loan officer, the note should be initialed correctly, and
the property address verified. This was a breach of the representation and warranty contained in
section 3.02(p) (The origination and collection practices used by Countrywide with respect to
each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary
in the mortgage origination and servicing business . . . .).
4.7.10 With respect to loan #106658014 in pool 9:
4.7.10.1 The borrowers debt-to-income ratio was 49.578%. The
underwriters (Universal American Mortgage Company), underwriting guidelines provide that
the maximum debt-to-income ratio for a Full Doc loan where the CLTV is 95% is 38% (or 45%
for an 80/20 loan). This was a breach of the representation and warranty contained in the
Purchase Confirmation dated April 28, 2006, which stated that, [e]ach Mortgage Loan conforms
to the jumbo underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's
jumbo credit underwriting guidelines, as applicable, in effect at the time of origination.
4.7.11 With respect to loan # 106723086 in pool 7:
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COMPLAINT 16
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.11.1 The Notice of Right to Cancel was not in the file. Proper,
prudent and customary origination practices required the Notice of Right to Cancel to be signed
and dated. This was a breach of the representation and warranty contained in section 3.02(p)
(The origination and collection practices used by Countrywide with respect to each Mortgage
Note and Mortgage have been in all respects legal, proper, prudent and customary in the
mortgage origination and servicing business . . . .).
4.7.12 With respect to loan # 107334680 in pool 8:
4.7.12.1 The loan officer did not sign the final loan application.
Proper, prudent and customary origination practices require the final loan application to be
signed and dated by the loan officer. This was a breach of the representation and warranty
contained in section 3.02(p) (The origination and collection practices used by Countrywide with
respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and
customary in the mortgage origination and servicing business . . . .).
4.7.12.2 The borrowers debt-to-income ratio was 52.40%.
Countrywides guidelines provide that the maximum debt-to-income ratio for an 80% LTV
Full/Alt loan is 40%. This was a breach of the representation and warranty contained in the
Purchase Confirmation dated March 31, 2006, which stated that, [e]ach Mortgage Loan
conforms to the jumbo underwriting guidelines of the prior owner of the Mortgage Loans or
Countrywide's jumbo credit underwriting guidelines, as applicable, in effect at the time of
origination.
4.7.13 With respect to loan # 109144307 in pool 4:
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COMPLAINT 17
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.13.1 The loan officer did not sign the final loan application.
Proper, prudent and customary origination practices require the final loan application to be
signed and dated by the loan officer. This is a breach of the representation and warranty
contained in section 3.02(p) (The origination and collection practices used by Countrywide with
respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and
customary in the mortgage origination and servicing business . . . .)
4.7.13.2 No business license, tax return or asset verification was in
the file. Countrywide's Reduced Doc documentation requirements required that the borrower's
employment and assets be verified. This is a breach of the representation and warranty contained
in the Purchase Confirmation dated September 30, 2005, which stated, [e]ach Mortgage Loan
conforms to the jumbo underwriting guidelines of the prior owner of the Mortgage Loans or
Countrywide's jumbo credit underwriting guidelines, as applicable, in effect at the time of
origination.
4.7.14 With respect to loan # 109620780 in pool 5:
4.7.14.1 There was no flood certificate in the file and the hazard
insurance coverage may be inadequate. Proper, prudent and customary loan origination practices
require a flood certificate to be in the file, and adequate hazard insurance coverage. This was a
breach of the representation and warranty contained in section 3.02(f) (All buildings upon the
Mortgaged property are insured by an insurer acceptable to an Agency against loss by fire . . . .)
and section 3.02(p) (The origination and collection practices used by Countrywide with respect
to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and
customary in the mortgage origination and servicing business . . . .).
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COMPLAINT 18
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.14.2 No business license was in the file (business license
information pulled from the Washington State Dept. of Revenue website). Countrywide's
Reduced Documentation requirements require that the borrower's employment be verified. This
was a breach of the representation and warranty contained in the Purchase Confirmation dated
October 28, 2005, which stated, [e]ach Mortgage Loan conforms to the jumbo underwriting
guidelines of the prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting
guidelines, as applicable, in effect at the time of origination.
4.7.14.3 There was no Assignment of Mortgage in the file. This
was a breach of the representation and warranty contained in section 3.02(x) (Except for the
absence of recording information, the Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is
located.).
4.7.14.4 Countrywide's Clues Report imposed an underwriting
condition that the borrower provide an explanation letter for four recent credit inquiries, and the
letter was not in the file. Proper, prudent and customary loan origination practices require
compliance with all underwriter conditions. This was a breach of representation and warranty
contained in section 3.02(p) (The origination and collection practices used by Countrywide with
respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and
customary in the mortgage origination and servicing business . . . .) and the representation and
warranty in the Purchase Confirmation dated October 28, 2005, which stated, [e]ach Mortgage
Loan conforms to the jumbo underwriting guidelines of the prior owner of the Mortgage Loans
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COMPLAINT 20
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.16.3 The title policy did not identify the trust identified on the
mortgage. Proper, prudent and customary origination practices require the name on the
mortgage to match the name on the title insurance policy. This was a breach of the
representation and warranty contained in section 3.02(p) (The origination and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage origination and servicing
business . . . .).
4.7.17 With respect to loan # 110251853 in pool 3:
4.7.17.1 The final inspection and photos were not in the file.
Proper, prudent and customary origination practices for new construction require the subject
property be completed per plans and specifications and evidence of completion to be in the file.
This was a breach of the representation and warranty contained in section 3.02(p) (The
origination and collection practices used by Countrywide with respect to each Mortgage Note
and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage
origination and servicing business . . . . ).
4.7.17.2 The Certificate of Occupancy from the appropriate
authorities was not in the file. This was a breach of the representation and warranty contained in
section 3.02(w) (To the best of Countrywide's knowledge, all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions of the Mortgaged
property, and with respect to the use and occupancy of the same including certificates of
occupancy, have been made or obtained from the appropriate authorities.)
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COMPLAINT 21
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.17.3 The loan documents (mortgage and note etc.) indicate the
city is North Las Vegas; and the Appraisal, Title and Flood Cert. indicate the city is Las Vegas.
Proper, prudent and customary origination practices are to verify the property address. This was
a breach of representation and warranty contained in section 3.02(p) (The origination and
collection practices used by Countrywide with respect to each Mortgage Note and Mortgage
have been in all respects legal, proper, prudent and customary in the mortgage origination and
servicing business . . . .).
4.7.18 With respect to loan # 110252325 in pool 3:
4.7.18.1 The loan officer did not sign the final loan application.
Proper, prudent and customary origination practices require the final loan application to be
signed and dated by the loan officer. This was a breach of the representation and warranty
contained in section 3.02(p) (The origination and collection practices used by Countrywide with
respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and
customary in the mortgage origination and servicing business . . . . ).
4.7.19 With respect to loan # 110633599 in pool 3:
4.7.19.1 The borrowers most recent monthly asset or bank
statement was not in the file (this loan is a cash-out refinance). The applicable underwriting
guidelines require the borrower's employment and assets to be verified. There is no business
license or CPA letter in the file. Proper, prudent and customary origination practices require the
borrowers employment and assets to be verified. This was a breach in the representation and
warranty contained in section 3.02(p) (The origination and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
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COMPLAINT 22
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
proper, prudent and customary in the mortgage origination and servicing business . . . .); and the
representations and warranties contained in the Purchase Confirmation dated August 31, 2005,
which states, [e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the prior
owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as
applicable, in effect at the time of origination..
4.7.19.2 The loan amount was $150,000, which is below Fannie
Mae and Freddie Mac limits. This was a breach of the representation and warranty contained in
the Purchase confirmation dated August 31, 2005, which states, [e]ach Mortgage Loan is a
jumbo Mortgage Loan . . . .
4.7.19.3 The property address was not indicated on the insurance
binder. The insurance agent has used the legal description for the property address. This was a
breach of the representation and warranty contained in section 3.02(f) (All buildings upon the
Mortgaged property are insured by an insurer acceptable to an Agency against loss by fire,
hazards of extended coverage . . . .).
4.7.20 With respect to loan #110633615 in pool 3:
4.7.20.1 The loan balance was $232,000, which was below Fannie
Mae and Freddie Mac loan limits. This was a breach of the representations and warranties
contained in the Purchase Confirmation dated August 31, 2005, which states that, [e]ach
Mortgage Loan is a jumbo Mortgage Loan . . . .
4.7.21 With respect to loan #110633735 in pool 3:
4.7.21.1 The Loan amount was $183,920, which was below Fannie
Mae and Freddie Mac limits. This was a breach in the representation and warranty contained in
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COMPLAINT 23
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
the Purchase confirmation dated August 31, 2005, which states, [e]ach Mortgage Loan is a
jumbo mortgage and a fixed rate mortgage loan . . . .
4.7.22 With respect to loan #110633767 in pool 3:
4.7.22.1 The Loan amount was $249,600, which was below Fannie
Mae and Freddie Mac limits. This was a breach of the representation and warranty contained in
the Purchase confirmation dated August 31, 2005, which states, [e]ach Mortgage Loan is a
jumbo mortgage Loan . . . .
4.7.22.2 The Note was not endorsed in blank or to Countrywide.
This was a breach of the representations and warranties contained in section 3.02(e) (The
Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim
or defense. . . .) and section 3.02(l) (Countrywide is the sole owner and holder of the Mortgage
Loan. The Mortgage Loan is not assigned or pledged, and Countrywide has good and
marketable title thereto, and has full right to transfer and sell the Mortgage Loan to the Purchaser
free and clear . . . ).
4.7.23 With respect to loan # 110633815 in pool 3:
4.7.23.1 No assets are indicated on the application and the loan is a
cash-out refinance. The applicable underwriting guidelines require that the borrower's
employment and assets be verified. The underwriter's Loan Approval indicates this is a limited
doc loan and that Partner Loan Services performed a verbal verification of employment
(VOE). The borrower is self-employed and there is no tax return or CPA letter in the file. The
Underwriter's Decision indicates there is no business data available on-line. This was a breach
of the representation and warranty contained in the Purchase Confirmation dated August 31,
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COMPLAINT 24
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
2005, which states, [e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the
prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as
applicable, in effect at the time of origination.
4.7.23.2 The Loan amount was $170,300, which is below Fannie
Mae and Freddie Mac limits. This was a breach of the representation and warranty contained in
the Purchase Confirmation dated August 31, 2005, which states, [e]ach Mortgage Loan is a
jumbo Mortgage Loan . . . .
4.7.23.3 The insurance binder uses only the legal description for the
property address. The property address is not indicated on the insurance binder. This was a
breach of the representation and warranty contained in section 3.02(f) (All buildings upon the
Mortgaged property are insured by an insurer acceptable to an Agency against loss by fire,
hazards of extended coverage . . . .).
4.7.24 With respect to loan # 110633896 in pool 3:
4.7.24.1 The insurance binder was not in the file. Proper, prudent
and customary loan origination and collection practices require an insurance binder. This was a
breach of the representation and warranty contained in section 3.02(f) (All buildings upon the
Mortgaged property are insured by an insurer acceptable to an Agency against loss by fire,
hazards of extended coverage . . . .) and section 3.02(p) (The origination and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage origination and servicing
business . . . .).
4.7.25 With respect to loan # 111434157 in pool 4:
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COMPLAINT 25
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.25.1 The final loan application was not signed by the loan
officer, and a copy of the deed is not in the file. Proper, prudent and customary loan origination
and collection practices require the final application to be signed by the loan officer, and a copy
of the seller's deed to be in the file. This was a breach of the representation and warranty
contained in section 3.02(p) (The origination and collection practices used by Countrywide with
respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and
customary in the mortgage origination and servicing business. . . .).
4.7.26 With respect to loan # 111436725 in pool 4:
4.7.26.1 The title report was not in the file, and the new house
payment is $3,882. The Underwriter's Commitment Letter conditions the loan on receipt of a
copy of the title report to verify the seller is vested in title, and that the borrower's new house
payment is not to exceed $3,647. Proper, prudent and customary origination practices require
that all of the underwriter's conditions be satisfied. This was a breach of the representation and
warranty contained in section 3.02(p) (The origination and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business. . . .).
4.7.26.2 The final loan application was not signed by the loan
officer, and a copy of the deed is not in the file. Proper, prudent and customary loan origination
and collection practices require the final application be signed by the loan officer and a copy of
the seller's deed to be in the file. This was a breach of the representation and warranty contained
in section 3.02(p) (The origination and collection practices used by Countrywide with respect to
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COMPLAINT 26
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary
in the mortgage origination and servicing business . . . .).
4.7.27 With respect to loan # 112081171 in pool 4:
4.7.27.1 The Loan amount was $158,000, which is below applicable
Fannie Mae and Freddie Mac limits. This was a breach of the representation and warranty
contained in the Purchase Confirmation dated September 30, 2005, which states, [e]ach
Mortgage Loan is a jumbo mortgage and a fixed rate mortgage loan. . . .).
4.7.27.2 No assets were verified. The applicable underwriting
guidelines and proper, prudent and customary loan origination practices require that the
borrower's assets be verified with the most recent monthly bank or asset statement. This was a
breach of the representation and warranty contained in section 3.02(p) (The origination and
collection practices used by Countrywide with respect to each Mortgage Note and Mortgage
have been in all respects legal, proper, prudent and customary in the mortgage origination and
servicing business. . . .) and the representation and warranty contained in the Purchase
Confirmation dated September 30, 2005, which states, [e]ach Mortgage Loan conforms to the
jumbo underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's
jumbo credit underwriting guidelines, as applicable, in effect at the time of origination.
4.7.27.3 The borrowers DTI was 52.2817%. The underwriter
guidelines provide that the maximum DTI for this loan program was 50%. This was a breach of
the representation and warranty contained in the Purchase Confirmation dated September 30,
2005, which states, [e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the
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COMPLAINT 27
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Nold Muchinsky PLLCBellevue Place, Suite 930
10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as
applicable, in effect at the time of origination.
4.7.27.4 The final loan application was not signed by the loan
officer. Proper, prudent and customary loan origination and collection practices require the final
application to be signed by the loan officer. This was a breach of the representation and
warranty contained in section 3.02(p) (The origination and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business. . . . ).
4.7.28 With respect to loan # 112081243 in pool 4:
4.7.28.1 The Note was not endorsed in blank or to Countrywide.
This was a breach of the representations and warranties contained in section 3.02(e) (The
Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim
or defense . . . .) and section 3.02(l) (Countrywide is the sole owner and holder of the
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and Countrywide has good and
marketable title thereto, and has full right to transfer and sell the Mortgage Loan to the Purchaser
free and clear . . . .).
4.7.28.2 The Loan amount was $123,950, which was below
applicable Fannie Mae and Freddie Mac limits. This was a breach of the representation and
warranty contained in the Purchase Confirmation dated September 30, 2005, which states,
[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .
4.7.28.3 No assets were verified. The underwriters final report
indicates that no business data is available on-line for the borrower's current employer. The
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COMPLAINT 28
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425.289.5555 FAX425.289.6666
applicable underwriting guidelines require that the borrower's assets be verified with the most
recent monthly statement. This was a breach of the representation and warranty contained in
section 3.02(p) (The origination and collection practices used by Countrywide with respect to
each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary
in the mortgage origination and servicing business. . . .); and the representation and warranty
contained in the Purchase Confirmation dated September 30, 2005, which states, [e]ach
Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the
Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect
at the time of origination.
4.7.28.4 The final loan application was not signed by the loan
officer. Proper, prudent and customary loan origination and collection practices require the final
application to be signed by the loan officer. This was a breach of the representation and
warranty contained in section 3.02(p) (The origination and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business. . . .).
4.7.28.5 There was no assignment of mortgage in the file. This was
a breach of the representation and warranty contained in section 3.02(x) (Except for the absence
of recording information, the Assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is located.).
4.7.29 With respect to loan # 112081267 in pool 4:
4.7.29.1 The Loan amount was $171,200, which was below
applicable Fannie Mae and Freddie Mac limits. This was a breach of the representation and
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COMPLAINT 29
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warranty contained in the Purchase Confirmation dated September 30, 2005, which states,
[e]ach Mortgage Loan is a jumbo mortgage and a fixed rate mortgage loan. . . .
4.7.29.2 No assets were indicated on the application and no assets
were verified. Borrower received $1,786.20 cash back on the HUD. The applicable
underwriting guidelines and proper, prudent and customary origination practices require the
borrower's assets to be verified with the most recent monthly bank statement. This was a breach
of the representation and warranty contained in section 3.02(p) (The origination and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage origination and servicing
business. . . . ); and the representation and warranty contained in the Purchase Confirmation
dated September 30, 2005, which states, [e]ach Mortgage Loan conforms to the jumbo
underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's jumbo credit
underwriting guidelines, as applicable, in effect at the time of origination.
4.7.29.3 The property address was not indicated on the insurance
binder; only the legal description is indicated. The underwriters guidelines and proper, prudent
and customary origination practices require that the homeowner's policy show that the mailing
address and property address are the same. This was a breach of the representation and warranty
contained in section 3.02(f) (All buildings upon the Mortgaged property are insured by an
insurer acceptable to an Agency against loss by fire, hazards of extended coverage. . . .; section
3.02(p) (The origination and collection practices used by Countrywide with respect to each
Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in
the mortgage origination and servicing business. . . .); and the representation and warranty
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COMPLAINT 30
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425.289.5555 FAX425.289.6666
contained in the Purchase Confirmation dated September 30, 2005, which states, [e]ach
Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the
Mortgage Loans or Countrywides jumbo credit underwriting guidelines, as applicable, in effect
at the time of origination.
4.7.30 With respect to loan # 112238921 in pool 4:
4.7.30.1 After funding, during a post-closing audit, Ohio Savings
Bank determined that the APR and Finance Charge on the final Truth in Lending Disclosure
(TIL) was understated. Per Ohio Savings Bank's letter in the file, they made the necessary
adjustments, and informed the borrower. A corrected TIL was sent to the borrower along with a
refund check in the amount of $491. The corrected TIL in the file isn't signed by the borrower.
This was a breach of the representation and warranty contained in section 3.02(g) (Each
Mortgage Loan at the time of origination complied in all material respects with applicable state
law and federal laws including Truth-In-Lending. . . .).
4.7.30.2 The final application was not signed by the loan officer.
Proper, prudent and customary loan origination and collection practices require the final
application be signed by the loan officer. This was a breach in the representation and warranty
contained in section 3.02(p) (The origination and collection practices used by Countrywide with
respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and
customary in the mortgage origination and servicing business. . . .).
4.7.30.3 A copy of the deed was not in the file. Proper, prudent and
customary loan origination and collection practices require a copy of the deed be in the file. This
was a breach of the representation and warranty contained in section 3.02(p) (The origination
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COMPLAINT 31
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10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
and collection practices used by Countrywide with respect to each Mortgage Note and Mortgage
have been in all respects legal, proper, prudent and customary in the mortgage origination and
servicing business. . . . ).
4.7.30.4 The HUD in the file wasnt signed by the seller. Proper,
prudent and customary loan origination and collection practices require a copy of the seller's
signed HUD be in the file. This was a breach in the representation and warranty contained in
section 3.02(p) (The origination and collection practices used by Countrywide with respect to
each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary
in the mortgage origination and servicing business. . . .).
4.7.30.5 The borrower's HUD indicates the seller credited the
borrower $12,000, and the borrower's costs were only $9,985.07. The borrower paid $8,003
above the appraisal value for the property (sales price $516,003 and appraisal value $508,000).
Proper, prudent and customary loan origination and collection practices require that the seller
paid closing costs cannot exceed the borrower's actual costs. If this was a sales concession, a
reduced sales price should have been reflected. This was a breach of the representation and
warranty contained in section 3.02(p) (The origination and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business. . . .).
4.7.30.6 The borrower is married, but the spouse did not sign the
TIL. Proper, prudent and customary origination practices require that the borrowers spouse sign
the TIL. This was a breach of the representation and warranty contained in section 3.02(p) (The
origination and collection practices used by Countrywide with respect to each Mortgage Note
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COMPLAINT 32
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10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage
origination and servicing business. . . .).
4.7.30.7 There was no tax return or business license in the file.
Instead, business information was pulled from the State of Arizonas public access system, and
was last updated July 29, 2003. The applicable underwriting guidelines require that the
borrower's employment be verified with a business license or tax return. This was a breach of
the representation and warranty contained in the Purchase Confirmation dated September 30,
2005, which states, [e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the
prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as
applicable, in effect at the time of origination.
4.7.31 With respect to loan # 97207103 in pool 4:
4.7.31.1 The note was not endorsed in blank or to Countrywide.
This was a breach of the representations and warranties contained in section 3.02(e) (The
Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim
or defense . . .) and section 3.02(l) (Countrywide is the sole owner and holder of the Mortgage
Loan. The Mortgage Loan is not assigned or pledged, and Countrywide has good and
marketable title thereto, and has full right to transfer and sell the Mortgage Loan to the Purchaser
free and clear . . .).
4.7.31.2 The loan officer failed to sign and date the final loan
application. Proper, prudent and customary origination practices require the final loan
application to be signed and dated by the loan officer. This was a breach of the representation
and warranty contained in section 3.02(p) (The origination and collection practices used by
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COMPLAINT 33
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10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business . . .).
4.7.31.3 There was no signed 4506T in the file. The applicable
underwriting guidelines required a signed 4506T and the underwriter conditioned approval upon
receipt of a signed 4506T. Proper, prudent and customary loan origination practices require a
signed 4506T and require that an underwriters conditions be satisfied. This was a breach of the
representations and warranties contained in section 3.02(p) (The origination and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage origination and servicing
business. . .) and in the Purchase Confirmation dated May 31, 2005, which stated that, [e]ach
Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the
Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect
at the time of origination.
4.7.31.4 There was no final title report or policy in the file. Proper,
prudent and customary practices require a copy of the title report and policy. This was a breach
of the representation and warranty contained in section 3.02(p) (The origination and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage origination and servicing
business . . . .).
4.7.31.5 There was no Deed in the file. Proper, prudent and
customary practices require a copy of the Deed. This was a breach of the representation and
warranty contained in section 3.02(p) (The origination and collection practices used by
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COMPLAINT 34
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10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business . . .).
4.7.31.6 The underwriter conditioned approval upon determination
that the borrowers income to be deemed reasonable and consistent with the borrowers
occupation, which was not present in the file. Proper, prudent and customary origination
practices require verification of income for the borrower. This was a breach of the representation
and warranty contained in section 3.02(p) (The origination and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business . . .).
4.7.32 With respect to loan # 97094120 in pool 2:
4.7.32.1 The loan officer and borrower failed to date the final loan
application. Proper, prudent and customary origination practices require the final loan
application to be dated by the loan officer and borrower. This was a breach of the representation
and warranty contained in section 3.02(p) (The origination and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business . . .).
4.7.32.2 There was no appraisal in the file. Proper, prudent and
customary origination practices require a copy of the appraisal in the file. This was a breach of
the representations and warranties contained in section 3.02(p) (The origination and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage origination and servicing
business . . .) and section 3.02(t) (The Credit File contains an appraisal of the related
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COMPLAINT 35
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425.289.5555 FAX425.289.6666
Mortgaged Property signed prior to the approval of the Mortgage loan application by an
appraiser who meets the minimum requisite qualifications by an Agency for appraisers . . .).
4.7.32.3 There was no verification of assets in the file. The
applicable underwriting guidelines required verification of assets. Proper, prudent and
customary loan origination practices require verification of assets. This was a breach of the
representations and warranties contained in section 3.02(p) (The origination and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage origination and servicing
business. . .) and in the Purchase Confirmation dated May 31, 2005, which stated that, [e]ach
Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the
Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect
at the time of origination.
4.7.32.4 There was no verification of income in the file. The
applicable underwriting guidelines required verification of income. Proper, prudent and
customary loan origination practices require verification of income. This was a breach of the
representations and warranties contained in section 3.02(p) (The origination and collection
practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in
all respects legal, proper, prudent and customary in the mortgage origination and servicing
business. . .) and in the Purchase Confirmation dated May 31, 2005, which stated that, [e]ach
Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the
Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect
at the time of origination.
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COMPLAINT 36
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10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
4.7.32.5 There was no Deed or Purchase and Sale Agreement in the
file. Proper, prudent and customary practices require a copy of the Deed and the Purchase and
Sale Agreement. This was a breach of the representation and warranty contained in section
3.02(p) (The origination and collection practices used by Countrywide with respect to each
Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in
the mortgage origination and servicing business . . .).
4.7.32.6 The borrower was married and was to hold title as an
individual; the Loan Closing Instructions required the borrowers spouse to execute a disclaimer
deed. No such deed was in the file. Proper, prudent and customary loan origination practices
require adherence to the Loan Closing Instructions. This was a breach of the representations and
warranties contained in section 3.02(p) (The origination and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business. . .).
4.7.32.7 The Certificate of Occupancy was not in the file. Without
an appraisal in the file, it is impossible to determine the age of the building. Proper, prudent and
customary loan origination practices require a copy of the Certificate of Occupancy be in the file
for new construction. This was a breach of the representation and warranty contained in section
3.02(w) (To the best of Countrywide's knowledge, the mortgaged property is lawfully occupied
under applicable law . . . .).
4.7.32.8 An account listed on the credit report was omitted from the
application and the underwriting analysis. The underwriter conditioned approval upon receipt of
documentation supporting the omission of the liability. No such verification was in the file.
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COMPLAINT 38
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10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect
at the time of origination; section 3.02(p) (The origination and collection practices used by
Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing business. . . .).
4.7.34 With respect to loan #117037134 in pool 8:
4.7.34.1 The second note and copies of the third party bill payoffs
are not in the file. Aegis' Underwriting Decision requires a copy of the second note, and copies
of third party bills appearing on the HUD. Proper, prudent and customary origination practices
require that all of the underwriter's conditions be satisfied. This was a breach of the
representations and warranties contained in the Purchase Confirmation dated March 31, 2005,
which states, [e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the prior
owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as
applicable, in effect at the time of origination, and section 3.02(p) (The origination and
collection practices used by Countrywide with respect to each Mortgage Note and Mortgage
have been in all respects legal, proper, prudent and customary in the mortgage origination and
servicing business. . . .).
4.7.34.2 The borrowers spouse did not sign the Notice of
Right to Cancel. The spouse is on title. Proper, prudent and customary loan origination
practices require the non-borrowing spouse to sign the Notice of Right to Cancel if on title. This
was a breach of the representation and warranty contained in section 3.02(p) (The origination
and collection practices used by Countrywide with respect to each Mortgage Note and Mortgage
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COMPLAINT 39
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10500 NE 8th StreetBellevue, WA 98004
425.289.5555 FAX425.289.6666
have been in all respects legal, proper, prudent and customary in the mortgage origination and
servicing business. . . .).
4.7.35 With respect to loan #118062513 in pool 9:
4.7.35.1 The Note was not endorsed in blank or to Countrywide.
This was a breach of the representations and warranties contained in section 3.02(e) (The
Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim
or defense. . . .) and section 3.02(l) (Countrywide is the sole owner and holder of the Mortgage
Loan. The Mortgage Loan is not assigned or pledged, and Countrywide has good and
marketable title thereto, and has full right to transfer and sell the Mortgage Loan to the Purchaser
free and clear. . . .).
4.7.35.2 The Loan amount was $260,950, which is below applicable
Fannie Mae and Freddie Mac limits. This was a breach of the representation and warranty
contained in the Purchase Confirmation dated April 28, 2006, which states that, [e]ach
Mortgage Loan is a jumbo Mortgage Loan . . . .
4.7.35.3 The spouse did not sign the TIL. Proper, prudent and
customary loan origination practices require the non-borrowing spouse to sign the TIL. This was
a breach of the representation and warranty contained in section 3.02(p) (The origination and
collection practices used by Countrywide with respect to each Mortgage Note and Mortgage
have been in all respects legal, proper, prudent and customary in the mortgage origination and
servicing business . . . .).
4.7.35.4 The title report required an affidavit from the borrower that
was not in the file, and the ALTA was not showing clear title. Proper, prudent and customary
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COMPLAINT 40
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425.289.5555 FAX425.289.6666
collection practices require the title report conditions be cleared prior to closing. This was a
breach of the representation and warranty contained in section 3.02(j) (The Mortgage is a valid,
existing and enforceable first or second lien (as specified in the related Mortgage Loan Schedule)
on the Mortgaged Property, including all improvements on the Mortgaged Property, subject only
to (i) the lien of current real property taxes and assessments not yet due and payable; (ii)
covenants, conditions and restrictions, rights of way, easements and other matters of public
record as of the date of recording that are acceptable to mortgage lending institutions generally
and specifically referred to in lender's title insurance policy delivered to the originator of the
Mortgage Loan and that do not adversely affect the Appraised Value (as evidenced by an
appraisal referred to in such definition) of the Mortgaged Property; (iii) if a second lien,