AMI Comments on the Attorneys General Investigation Into Mortgage Servicers
The Association of Mortgage Investors (AMI) has announced its support for the state attorneys general investigating the allegations surrounding servicer and mortgage industry foreclosure practices, but cautions against hasty action to assign liability or settle allegations surrounding foreclosure paperwork and processing. AMI feels that a variety of mortgage industry practices must be reformed and that any potential legal settlement must ensure that the responsible parties are actually held legally accountable. “A hasty and ill-formulated legal settlement may harm the investors of mortgage-backed securities (MBS), namely retirees, municipalities, government entities, state pension funds, retirement systems, universities, and charitable endowments. It is important that any legal settlement require large banks and servicers to accept the legal responsibility for their actions. Taxpayers, policemen, firemen, teachers, and civil servants must not lose out in the haste for a settlement for settlement’s sake,” said Chris Katopis, executive director of AMI. “The best legal solution requires the responsible parties to repurchase defective mortgages when these defects are identified, as they are legally required under the trust agreements. Accordingly, all parties must enforce the contractual obligations requiring trustees and servicers to reimburse the trust for losses incurred due to breaches of representations and warranties.” Speaker of the House Rep. Nancy Pelosi, along with more than 30 members of Congress wrote, “[i]t is time that banks are held accountable for their practices.” AMI agrees with Rep. Pelosi's comment and the association contends the implications reach much farther than the Speaker and her colleagues acknowledge. All must appreciate that the scope of this mortgage foreclosure crisis also includes the impact on America’s investments in pension and retirement funds, as well as, our shared responsibility to seniors. Recently, AMI called upon residential mortgage-backed securities (RMBS) trustees to perform their responsibilities and protect millions of Americans’ savings and pension accounts, in the wake of reports about serious irregularities in the processing of legal affidavits by the nation’s largest mortgage servicers. The recent press reports detail how large mortgage servicers pursuing foreclosure actions may have filed inadequate and legally defective affidavits. For more information, visit www.the-ami.org.