Deutsche Bank Foreclosures Dismissal Verified

The post regarding the granted motion to dismiss has been verified.  See the previous post for details. In a nutshell, the owner of pooled mortgage assets sought to foreclose on properties backing the mortgages, and the judge found that they did not show proper assignment from the mortgage originator or servicer, or any evidence that they actually owned the mortgages. This has the potential for wide reaching consequences. I doubt if most of the CDO's have properly had their alleged mortgages properly assigned (and this might have had to happen several times as the mortgage was bounced around the food chain). If you think certain tranches of structured products have been considered worthless in the past...

Click here to download the judge's ruling - Download Deutsche Bank foreclosure motion dismissed.pdf.

PS

It appears as if Plaintiff's counsel insulted the court by stating "You just don't understand how these things work, your honor". Yep! Real bright move...

Comments

[Rob Dawg]

Reading between the lines the judge was "this close" to dismissal WITH prejudice.

This is a job for.... Forensic Accountant! I smell a TV series.

[hauterio]

I'm 100% bearish, but I don't think this is as bad (for CDO owners) as it may seem

There's an excellent analysis at CR

http://calculatedrisk.blogspot.com/2007/11/in-re-foreclosure-cases.html

[Reggie]

As someone experienced in the hassles of getting mortgage assignments years after the fact, at least 25% of the original assignments will not be found. They will have to be recreated and certified. This will take some time (I know it took my banks some time). Then there is the ultimate conflicts that will arise when someone says x and someone else down the line says y about a document that no one could find.

I have been through this personally, and more than once. Like CR said, it doesn't mean the end of the world, but it definitely does mean a real adminsitrative headache, which means additional expenses, which reduces the desirability of a securitized vehicle that cannnot afford an additional desirability hits.