In one of the first cases to assert a private right of action on behalf of buyers of mortgage-backed securities (MBS) under the Trust Indenture Act, served as co-lead counsel for a consolidated class action against Bank of America, NA and U.S. Bank, NA (defendants).
The plaintiffs were investors in certificates issued by MBS trusts that were securitized by Washington Mutual (WaMu) and collateralized by mortgages it originated. We alleged that the defendants, who were trustees of the WaMu MBS trusts, breached both their contractual obligations to plaintiffs and provisions of the Trust Indenture Act governing their obligations to investors. Specifically, we alleged that defendants failed to take required action despite knowing that WaMu had breached certain representations and warranties regarding the quality of mortgages transferred to the trusts. Defendants’ failures caused substantial losses to the MBS trusts and resulting losses to the class. After extensive motion practice and discovery, the parties resolved the matter for $69 million.