Wash Fed v Countrywide

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 1 of 118

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David A. Nold, WSBA #19009 Thomas W. Stone, WSBA #37559 NOLD MUCHINSKY PLLC 10500 NE 8th St., Ste. 930 Bellevue, Washington 98004 Phone: (425) 289-5555 Attorneys for Plaintiff Washington Federal

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

WASHINGTON FEDERAL, a federally chartered savings association, Plaintiff, vs. COUNTRYWIDE HOME LOANS, INC. (d/b/a BANK OF AMERICA HOME LOANS), BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., Defendants.

NO. COMPLAINT FOR BREACH OF CONTRACT AND JURY 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. 1.1 NATURE OF ACTION

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 Federal’s purchase from Countrywide of 10 pools of mortgage loans (collectively the “Transaction Documents”). This is
COMPLAINT– 1

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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 7 approximately $400 million from Countrywide. The MLPSA and Transaction Documents 8 include specific representations and warranties by Countrywide regarding the Loans, including, 9 inter alia, that the Loans complied with specific underwriting guidelines, that its origination 10 practices were legal, prudent and customary in the industry, that the notes and mortgages or 11 deeds of trust (collectively “Mortgages”) were not subject to any defenses or set offs and were 12 enforceable in accordance with their terms, that Countrywide was the sole owner and holder of 13 14 15 16 17 18 19 20 21 22 23 24 25
COMPLAINT– 2

the Loans, and that the Loans conformed to the parameters specified in the MLPSA and Transaction Documents. Countrywide’s representations and warranties are described in more detail below. 1.3 The MLPSA provides that Countrywide’s 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 Federal’s 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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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 7 Mortgage Loan . . .” (Section 4.02); 8 1.5.2 9 convert the ownership of properties securing such of the Mortgage Loans as come into and 10 continue in default and as to which no satisfactory arrangements can be made for collection of 11 delinquent payments;” (Section 4.03(a)). 12 1.5.3 13 14 15 16 17 18 19 20 21 22 23 24 25
COMPLAINT– 3

“[U]se reasonable efforts to foreclose upon or otherwise comparably

“[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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Countrywide’s 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 7 breach, which go TO the heart of the MLPSA governing all loan pool purchases. 8 1.9 9 with the requirements of the MLPSA. For example: 10 1.9.1 11 defaults on a timely basis or of defects in the Loan documentation and underwriting; 12 1.9.2 13 14 15 16 17 18 19 20 21 22 23 24 25 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 Defendants have not used reasonable care to notify Washington Federal of Defendants have also breached their promises to service the Loans in accordance

Washington Federal as required by the MLPSA and/or have failed to follow Washington Federal’s 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 Federal’s 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,
COMPLAINT– 4

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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. 2.1 PARTIES

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.

7 2.2 8 Calabasas, California. Countrywide was the seller of the various loan pools and a party to the 9 MLPSA and Transaction Documents. 10 2.3 11 North Carolina and offices throughout the State of Washington, including in Seattle, 12 Washington. 13 14 15 16 17 18 19 20 21 22 23 24 25
COMPLAINT– 5

Countrywide is a New York corporation with its principal place of business in

BAC is a Delaware corporation with its principal place of business in Charlotte,

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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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

7 “Purchase Confirmation,” which set forth the terms of a purchase of a specific mortgage pool; 8 and (c) a “Mortgage Loan Schedule,” which described the attributes of the purchased Loans. 9 Collectively, these documents are referred to as the “Transaction Documents.” 10 A. 11 4.3 12 warranties concerning the origination and underwriting of the Loans it was selling to Washington 13 14 15 16 17 18 19 20 21 22 23 24 25
COMPLAINT– 6

Representations and Warranties Regarding Origination and Underwriting. In the MLPSA Countrywide set out numerous specific representations and

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 MLPSA § 3.02(c). 4.3.3 The Mortgage Note and the Mortgage were not subject to any right of There were no outstanding charges affecting the mortgaged property.

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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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

7 specified in the related Mortgage Loan Schedule) on the Mortgaged Property. MLPSA § 3.02(j). 8 4.3.8 9 good and marketable title thereto, and has full right to transfer and sell the Loan to Washington 10 Federal free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest 11 not specifically set forth in the related Mortgage Loan Schedule and has full right and authority 12 subject to no interest or participation of, or agreement with, any other party, to sell and assign 13 14 15 16 17 18 19 20 21 22 23 24 25
COMPLAINT– 7

Countrywide was the sole owner and holder of the Loan. Countrywide has

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 Countrywide’s 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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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 7 quality thresholds that indicated that borrowers would be able to repay their Loans on time and in 8 full, that the Loans were originated in accordance with legal requirements and industry 9 standards. Without these representations and warranties, the Loans would have represented a 10 much higher default risk and Washington Federal would not have purchased the Loans. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
COMPLAINT– 8

B.

Countrywide’s 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 Documents. 4.6.4 Mortgage notes with facial deficiencies such as lack of proper Loans that were not “jumbo” loans, as represented in the Transaction

endorsement, making Countrywide’s status as a holder questionable and giving rise to defenses. 4.6.5 Loans underwritten outside prudent and customary origination standards Nold ♦ Muchinsky PLLC
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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 insurance. 4.6.7 Loan-to-value and cumulative loan-to-value ratios in excess of those Incomplete loan files lacking deeds, notes or evidence of property hazard

represented on the Mortgage Loan Schedules. 7 4.6.8 8 guidelines, e.g., loans with excessive debt-to-income ratio, insufficient credit scores, and 9 insufficient employment, income or asset verification. 10 4.7 11 were found: 12 13 14 15 contained in section 3.02(f) (“All buildings upon the Mortgaged Property were insured by an 16 17 18 19 20 21 22 Mae and Freddie Mac loan limits. This was a breach of the representation and warranty 23 24 25 contained in the Purchase Confirmation dated August 31, 2005, which stated that, “[e]ach Mortgage Loan was a jumbo Mortgage Loan . . . .”
COMPLAINT– 9

Loans originated outside the parameters of the applicable underwriting

Specifically, the following breaches of specific representations and warranties 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

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

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4.7.2 1 2 3 4 5 6 7 8 9

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

10 11 12 13 14 15 16 the Purchase Confirmation dated August 31, 2005, which states that, “[e]ach Mortgage Loan is a 17 18 19 20 21 22 23 24 guidelines, as applicable, in effect at the time of origination.” 25
COMPLAINT– 10

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

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

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4.7.4 1 2 3 4 5 6 7 8 9

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

10 11 12 13 14 15 16 application. This was a breach of the representation and warranty contained in section 3.02(p) 17 18 19 20 21 22 23 24 representation and warranty contained in the Purchase Confirmation dated August 31, 2005, 25
COMPLAINT– 11

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

(“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

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which stated that, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the 1 prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as 2 3 4 5 6 7 8 9 jumbo credit underwriting guidelines, as applicable, in effect at the time of origination.” 10 11 12 13 14 15 16 fire, hazards of extended coverage and insurer is licensed to do business in the state where the 17 18 19 20 21 22 23 24 practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in 25
COMPLAINT– 12

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

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 Countrywide’s 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

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

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all respects legal, proper, prudent and customary in the mortgage origination and servicing 1 business . . . .”). 2 3 4 5 6 7 8 9 Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in 10 11 12 13 14 15 16 conforms to the jumbo underwriting guidelines of the prior owner of the Mortgage Loans or 17 18 19 20 21 22 23 24 25
COMPLAINT– 13

4.7.6 4.7.6.1

With respect to loan #103541533 in pool 3: 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

the mortgage origination and servicing business . . . .”). 4.7.6.2 The borrower’s 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

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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(“The Mortgage is a valid, existing and enforceable first or second lien (as specified in the 1 related Mortgage Loan Schedule) on the Mortgaged Property . . . .”). 2 3 4 5 6 7 8 9 clause naming Countrywide, its successors and or assigns as mortgagee . . . .”). 10 11 12 13 14 15 16 4.7.9 17 18 19 20 21 22 23 24 free and clear . . . .”) 25
COMPLAINT– 14

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

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.”). 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 15 of 118

4.7.9.2 1 2 3 4 5 6 7 8 9

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

10 11 12 13 14 15 16 underwriter’s (Universal American Mortgage Company), underwriting guidelines provide that 17 18 19 20 21 22 23 24 25
COMPLAINT– 15

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 borrower’s debt-to-income ratio was 49.578%. The

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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4.7.11.1 1 2 3 4 5 6 7 8 9

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 10 11 12 13 14 15 16 Countrywide’s guidelines provide that the maximum debt-to-income ratio for an 80% LTV 17 18 19 20 21 22 23 24 25
COMPLAINT– 16

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 borrower’s debt-to-income ratio was 52.40%.

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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4.7.13.1 1 2 3 4 5 6 7 8 9

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

10 11 12 13 14 15 16 4.7.14.1 17 18 19 20 21 22 23 24 customary in the mortgage origination and servicing business . . . .”). 25
COMPLAINT– 17

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: 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

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4.7.14.2 1 2 3 4 5 6 7 8 9

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 10 11 12 13 14 15 16 letter was not in the file. Proper, prudent and customary loan origination practices require 17 18 19 20 21 22 23 24 25
COMPLAINT– 18

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

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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or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect at the time of 1 origination.” 2 3 4 5 6 7 8 9 of the prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting 10 11 12 13 14 15 16 representation and warranty contained in section 3.02(p) (“The origination and collection 17 18 19 20 21 22 23 24 an insurer acceptable to an Agency against loss by fire, hazards of extended coverage . . . .”). 25
COMPLAINT– 19

4.7.15 With respect to loan # 110039884 in pool 4: 4.7.15.1 The paystubs in the file do not support the borrower’s

income, causing the borrower to have a 55%-65% debt-to-income ratio based on the information provided. This exceeds the maximum DTI in the underwriting guidelines. This was a breach of the representation and warranty contained in the Purchase Confirmation dated September 30, 2005, which stated that, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines

guidelines, as applicable, in effect at the time of origination.” 4.7.16 With respect to loan # 110180902 in pool 4: 4.7.16.1 The borrower and 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 borrower and loan officer. This was a breach of the

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 . . . .”). 4.7.16.2 An Amended Declaration for the Insurance Binder was in

the file but did not indicate the coverage amount. This was a breach of the representation and warranty contained in section 3.02(f) (“All buildings upon the Mortgaged property are insured by

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 20 of 118

4.7.16.3 1 2 3 4 5 6 7 8 9 4.7.17.1 10 11 12 13 14 15 16

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: 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 . . . . “).

17 18 19 20 21 22 23 24 25
COMPLAINT– 20

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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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 21 of 118

4.7.17.3 1 2 3 4 5 6 7 8 9 4.7.18.1 10 11 12 13 14 15 16

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: 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:

17 18 19 20 21 22 23 24 Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, 25
COMPLAINT– 21

4.7.19.1

The borrower’s 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 borrower’s 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 22 of 118

proper, prudent and customary in the mortgage origination and servicing business . . . .”); and the 1 representations and warranties contained in the Purchase Confirmation dated August 31, 2005, 2 3 4 5 6 7 8 9 jumbo Mortgage Loan . . . .” 10 11 12 13 14 15 16 4.7.20 With respect to loan #110633615 in pool 3: 17 18 19 20 21 22 23 24 Mae and Freddie Mac limits. This was a breach in the representation and warranty contained in 25
COMPLAINT– 22

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

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 . . . .”).

4.7.20.1

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

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the Purchase confirmation dated August 31, 2005, which states, “[e]ach Mortgage Loan is a 1 jumbo mortgage and a fixed rate mortgage loan . . . .” 2 3 4 5 6 7 8 9 This was a breach of the representations and warranties contained in section 3.02(e) (“The 10 11 12 13 14 15 16 4.7.23 With respect to loan # 110633815 in pool 3: 17 18 19 20 21 22 23 24 of the representation and warranty contained in the Purchase Confirmation dated August 31, 25
COMPLAINT– 23

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.

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 . . . “).

4.7.23.1

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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 24 of 118

2005, which states, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the 1 prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as 2 3 4 5 6 7 8 9 property address. The property address is not indicated on the insurance binder. This was a 10 11 12 13 14 15 16 and customary loan origination and collection practices require an insurance binder. This was a 17 18 19 20 21 22 23 24 4.7.25 With respect to loan # 111434157 in pool 4: 25
COMPLAINT– 24

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

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

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 . . . .”).

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4.7.25.1 1 2 3 4 5 6 7 8 9 4.7.26.1 10 11 12 13 14 15 16

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: 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,

17 18 19 20 21 22 23 24 25
COMPLAINT– 25

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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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 26 of 118

each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary 1 in the mortgage origination and servicing business . . . .”). 2 3 4 5 6 7 8 9 guidelines and proper, prudent and customary loan origination practices require that the 10 11 12 13 14 15 16 Confirmation dated September 30, 2005, which states, “[e]ach Mortgage Loan conforms to the 17 18 19 20 21 22 23 24 25
COMPLAINT– 26

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

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

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 borrower’s 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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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 27 of 118

prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as 1 applicable, in effect at the time of origination.” 2 3 4 5 6 7 8 9 4.7.28 With respect to loan # 112081243 in pool 4: 10 11 12 13 14 15 16 marketable title thereto, and has full right to transfer and sell the Mortgage Loan to the Purchaser 17 18 19 20 21 22 23 24 indicates that no business data is available on-line for the borrower's current employer. The 25
COMPLAINT– 27

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. . . . “).

4.7.28.1

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

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 underwriter’s final report

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applicable underwriting guidelines require that the borrower's assets be verified with the most 1 recent monthly statement. This was a breach of the representation and warranty contained in 2 3 4 5 6 7 8 9 at the time of origination.” 10 11 12 13 14 15 16 proper, prudent and customary in the mortgage origination and servicing business. . . .”). 17 18 19 20 21 22 23 24 applicable Fannie Mae and Freddie Mac limits. This was a breach of the representation and 25
COMPLAINT– 28

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

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,

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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 29 of 118

warranty contained in the Purchase Confirmation dated September 30, 2005, which states, 1 “[e]ach Mortgage Loan is a jumbo mortgage and a fixed rate mortgage loan. . . .” 2 3 4 5 6 7 8 9 all respects legal, proper, prudent and customary in the mortgage origination and servicing 10 11 12 13 14 15 16 binder; only the legal description is indicated. The underwriter’s guidelines and proper, prudent 17 18 19 20 21 22 23 24 the mortgage origination and servicing business. . . .”); and the representation and warranty 25
COMPLAINT– 29

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

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

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

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contained in the Purchase Confirmation dated September 30, 2005, which states, “[e]ach 1 Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the 2 3 4 5 6 7 8 9 adjustments, and informed the borrower. A corrected TIL was sent to the borrower along with a 10 11 12 13 14 15 16 Proper, prudent and customary loan origination and collection practices require the final 17 18 19 20 21 22 23 24 was a breach of the representation and warranty contained in section 3.02(p) (“The origination 25
COMPLAINT– 30

Mortgage Loans or Countrywide’s 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

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.

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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 31 of 118

and collection practices used by Countrywide with respect to each Mortgage Note and Mortgage 1 have been in all respects legal, proper, prudent and customary in the mortgage origination and 2 3 4 5 6 7 8 9 in the mortgage origination and servicing business. . . .”). 10 11 12 13 14 15 16 reduced sales price should have been reflected. This was a breach of the representation and 17 18 19 20 21 22 23 24 origination and collection practices used by Countrywide with respect to each Mortgage Note 25
COMPLAINT– 31

servicing business. . . . “). 4.7.30.4 The HUD in the file wasn’t 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

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

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 borrower’s spouse sign the TIL. This was a breach of the representation and warranty contained in section 3.02(p) (“The

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 32 of 118

and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage 1 origination and servicing business. . . .”). 2 3 4 5 6 7 8 9 prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as 10 11 12 13 14 15 16 or defense . . .”) and section 3.02(l) (“Countrywide is the sole owner and holder of the Mortgage 17 18 19 20 21 22 23 24 and warranty contained in section 3.02(p) (“The origination and collection practices used by 25
COMPLAINT– 32

4.7.30.7

There was no tax return or business license in the file.

Instead, business information was pulled from the State of Arizona’s 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

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

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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 33 of 118

Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, 1 proper, prudent and customary in the mortgage origination and servicing business . . .”). 2 3 4 5 6 7 8 9 all respects legal, proper, prudent and customary in the mortgage origination and servicing 10 11 12 13 14 15 16 prudent and customary practices require a copy of the title report and policy. This was a breach 17 18 19 20 21 22 23 24 warranty contained in section 3.02(p) (“The origination and collection practices used by 25
COMPLAINT– 33

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 underwriter’s 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

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,

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

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Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, 1 proper, prudent and customary in the mortgage origination and servicing business . . .”). 2 3 4 5 6 7 8 9 proper, prudent and customary in the mortgage origination and servicing business . . .”). 10 11 12 13 14 15 16 Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, 17 18 19 20 21 22 23 24 business . . .”) and section 3.02(t) (“The Credit File contains an appraisal of the related 25
COMPLAINT– 34

4.7.31.6

The underwriter conditioned approval upon determination

that the borrower’s income to be deemed reasonable and consistent with the borrower’s 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,

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

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

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Mortgaged Property signed prior to the approval of the Mortgage loan application by an 1 appraiser who meets the minimum requisite qualifications by an Agency for appraisers . . .”). 2 3 4 5 6 7 8 9 business. . .”) and in the Purchase Confirmation dated May 31, 2005, which stated that, “[e]ach 10 11 12 13 14 15 16 customary loan origination practices require verification of income. This was a breach of the 17 18 19 20 21 22 23 24 at the time of origination.” 25
COMPLAINT– 35

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

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

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

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4.7.32.5 1 2 3 4 5 6 7 8 9

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 borrower’s spouse to execute a disclaimer deed. No such deed was in the file. Proper, prudent and customary loan origination practices

10 11 12 13 14 15 16 an appraisal in the file, it is impossible to determine the age of the building. Proper, prudent and 17 18 19 20 21 22 23 24 documentation supporting the omission of the liability. No such verification was in the file. 25
COMPLAINT– 36

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

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

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Proper, prudent and customary practices require adherence to the underwriting conditions. This 1 was a breach of the representation and warranty contained in section 3.02(p) (“The origination 2 3 4 5 6 7 8 9 a breach of the representation and warranty contained in section 3.02(a) (“The information 10 11 12 13 14 15 16 4.7.33.3 17 18 19 20 21 22 23 24 Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the 25
COMPLAINT– 37

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 . . .”). 4.7.33 With respect to loan #117035998 in pool 9: 4.7.33.1 The CLTV on the Mortgage Loan Schedule shows 80%,

however, there was an underlying second mortgage and the CLTV is actually 94.91%. This was

contained in the Mortgage Loan Schedule is complete, true and correct in all material respects.”). 4.7.33.2 The Loan amount was $172,800, 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 April 28, 2005, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” The Title Policy does not show the Subordination

Agreement recorded, and the second mortgage is not showing on the policy. The underwriter conditioned the loan on recording of the Subordination Agreement. The underwriter also required that both borrowers sign the 4506 (the only 4506 in the file is signed by the coborrower). 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 the Purchase Confirmation dated April 28, 2005, which states that, “[e]ach

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Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect 1 at the time of origination”; section 3.02(p) (“The origination and collection practices used by 2 3 4 5 6 7 8 9 require that all of the underwriter's conditions be satisfied. 10 11 12 13 14 15 16 have been in all respects legal, proper, prudent and customary in the mortgage origination and 17 18 19 20 21 22 23 24 25
COMPLAINT– 38

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 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

servicing business. . . .”). 4.7.34.2 The borrower’s 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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have been in all respects legal, proper, prudent and customary in the mortgage origination and 1 servicing business. . . .”). 2 3 4 5 6 7 8 9 marketable title thereto, and has full right to transfer and sell the Mortgage Loan to the Purchaser 10 11 12 13 14 15 16 4.7.35.3 17 18 19 20 21 22 23 24 was not in the file, and the ALTA was not showing clear title. Proper, prudent and customary 25
COMPLAINT– 39

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

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 . . . .” 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

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collection practices require the title report conditions be cleared prior to closing. This was a 1 breach of the representation and warranty contained in section 3.02(j) (“The Mortgage is a valid, 2 3 4 5 6 7 8 9 Mortgage Loan and that do not adversely affect the Appraised Value (as evidenced by an 10 11 12 13 14 15 16 Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, 17 18 19 20 21 22 23 24 25
COMPLAINT– 40

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

appraisal referred to in such definition) of the Mortgaged Property; (iii) if a second lien, any first mortgage loan secured by the Mortgaged Property; and (iv) other matters to which like properties are commonly subject that do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.”); and section 3.02(p) (“The origination and collection practices used by

proper, prudent and customary in the mortgage origination and servicing business . . . .”). 4.7.35.5 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.”). 4.7.36 With respect to loan # 120537683 in pool 8:

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4.7.36.1 1 2 3 4 5 6 7 8 9

The mortgage was not shown on the title policy. Proper,

prudent and customary title practices require the title policy to show the mortgage. 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 . . . .”). 4.7.37 With respect to loan #120741064 in pool 8: 4.7.37.1 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 10 11 12 13 14 15 16 4.7.37.2 17 18 19 20 21 22 23 24 the mortgage origination and servicing business . . . .”). 25
COMPLAINT– 41

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 . . . .”). There was no hazard insurance binder in the file. Proper,

prudent and customary loan origination and collection practices require a copy of the hazard insurance binder be in the file. This was a breach of the representations and warranties 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

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4.7.37.3 1 2 3 4 5 6 7 8 9

The loan officer did not sign or date the application.

Proper, prudent and customary loan origination and collection practices require the loan officer to sign and date the 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 . . . .”). 4.7.37.4 The appraiser's current license was not in the file.

Applicable underwriter’s guidelines and proper, prudent and customary loan origination practices require a copy of the appraiser's license in the file. This was a breach of the

10 11 12 13 14 15 16 prudent and customary in the mortgage origination and servicing business . . . .”); and the 17 18 19 20 21 22 23 24 25
COMPLAINT– 42

representations and warranties contained in section 3.02(t) (“The Credit File contains an appraisal of the related 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. . . .”); 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,

representation and warranty contained in the Purchase Confirmation dated March 31, 2006, which states 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.” 4.7.37.5 There is 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

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of recording information, the Assignment of Mortgage is in recordable form and is acceptable for 1 recording under the laws of the jurisdiction in which the Mortgaged Property is located.”) 2 3 4 5 6 7 8 9 located, insuring (subject to the exceptions contained in Section 3.02(j)(i), (ii) and (iii) above) 10 11 12 13 14 15 16 require the non-borrowing spouse to sign the TIL and Notice of Right to Cancel and require all 17 18 19 20 21 22 23 24 require a copy of the appraiser's license in the file. This was a breach of the representations and 25
COMPLAINT– 43

4.7.38 With respect to loan #120907348 in pool 6: 4.7.38.1 The Name of Insured on the title policy does not state "its

successors and/or assigns." 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

Countrywide, its successors and assigns as to the first or second priority lien of the Mortgage, as applicable . . . .”). 4.7.38.2 The non-borrowing spouse did not sign the TIL or Notice

of Right to Cancel. The underwriter required the dower rights be subjugated by the nonborrowing spouse. Proper, prudent and customary loan origination and collection practices

underwriter conditions to 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 . . . .”). 4.7.38.3 The appraiser's current license was not in the file. The

applicable underwriting guidelines and proper, prudent and customary loan origination practices

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warranties contained in section 3.02(t) (“The Credit File contains an appraisal of the related 1 Mortgaged Property signed prior to the approval of the Mortgage loan application by an 2 3 4 5 6 7 8 9 Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect 10 11 12 13 14 15 16 statement. This was a breach of the representations and warranties contained in the Purchase 17 18 19 20 21 22 23 24 4.7.40 With respect to loan #121162217 in pool 7: 25
COMPLAINT– 44

appraiser who meets the minimum requisite qualifications by an Agency for appraisers. . . .”); 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 January 31, 2006, which states that, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the

at the time of origination.” 4.7.39 With respect to loan #120952226 in pool 9: 4.7.39.1 No assets were indicated on the application, and no assets

were verified. Applicable underwriting guidelines and proper, prudent and customary origination practices require the borrower's assets be verified with the most recent monthly

Confirmation dated April 28, 2006, which states 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.”; 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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4.7.40.1 1 2 3 4 5 6 7 8 9

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. . . .”). 4.7.40.2 The applicable underwriting guidelines and prudent, proper

and customary loan origination practices require that the borrowers' income stated on the 10 11 12 13 14 15 16 underwriting guidelines, as applicable, in effect at the time of origination,” and section 3.02(p) 17 18 19 20 21 22 23 24 recording under the laws of the jurisdiction in which the Mortgaged Property is located.”). 25
COMPLAINT– 45

application must be deemed reasonable and consistent with the borrowers' occupations. There is no verification in the file indicating the borrowers' income is reasonable and consistent. This was a breach of the representations and warranties contained in the Purchase Confirmation dated February 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

(“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. . . .”). 4.7.40.3 There is 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

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4.7.41 With respect to loan #121927698 in pool 8: 1 4.7.41.1 2 3 4 5 6 7 8 9 have been in all respects legal, proper, prudent and customary in the mortgage origination and 10 11 12 13 14 15 16 the representations and warranties contained in section 3.02(j) (“The Mortgage is a valid, 17 18 19 20 21 22 23 24 Mortgage Loan and that do not adversely affect the Appraised Value (as evidenced by an 25
COMPLAINT– 46

The non-borrowing spouse did not sign the TIL and the

loan officer did not sign the final application. Some of the loan documents have an incorrect state indicated as the property address. Proper, prudent and customary loan origination and collection practices require the non-borrowing spouse to sign the TIL, the loan officer to sign the final application, and the correct property address to be indicated on the loan documents. 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

servicing business. . . .”). 4.7.41.2 The deed was not in the file. There are two Deeds of Trust

and a Judgment showing on the title report. The seller's HUD does not show any payoffs of these matters. Proper, prudent and customary loan origination and collection practices require a copy of the deed to be in the file, and the payoffs showing on the seller's HUD. This was a breach of

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

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appraisal referred to in such definition) of the Mortgaged Property; (iii) if a second lien, any first 1 mortgage loan secured by the Mortgaged Property; and (iv) other matters to which like properties 2 3 4 5 6 7 8 9 new construction, and the appraiser has indicated the appraisal was made "as is." Proper, 10 11 12 13 14 15 16 Mortgaged Property and, with respect to the use and occupancy of the same including certificates 17 18 19 20 21 22 23 24 25
COMPLAINT– 47

are commonly subject that do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.”) 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. . . .”). 4.7.41.3 The Certificate of Occupancy was not in the file. This was

prudent and customary loan origination and collection practices require a copy of the Certificate of Occupancy be 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, the mortgaged property is lawfully occupied under applicable law. 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

of occupancy, have been made or obtained from the appropriate authorities.”). 4.7.42 With respect to loan #121964679 in pool 9: 4.7.42.1 The loan officer did not sign or date the application.

Proper, prudent and customary loan origination and collection practices require the loan officer to sign and date the 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

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each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary 1 in the mortgage origination and servicing business. . . .”). 2 3 4 5 6 7 8 9 appraisers . . . .”); section 3.02(p) (“The origination and collection practices used by 10 11 12 13 14 15 16 at the time of origination.”). 17 18 19 20 21 22 23 24 origination and collection practices used by Countrywide with respect to each Mortgage Note 25
COMPLAINT– 48

4.7.42.2

The appraiser's current license was not in the file.

Applicable underwriting guidelines and proper, prudent and customary loan origination and collection practices require a copy of the appraiser's license in the file. This was a breach of the representations and warranties contained in section 3.02(t) (“The Credit File contains an appraisal of the related 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

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 April 28, 2006 (“Each 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

4.7.42.3

The mortgagee's name on the insurance binder did not state

“its successors and/or assigns.” Proper, prudent and customary loan origination and collection practices require the mortgagee's name on the hazard insurance binder to 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 section 3.02(p) (“The

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and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage 1 origination and servicing business . . . .”) 2 3 4 5 6 7 8 9 breach of the representations and warranties contained section 3.02(e) (“The Mortgage Note and 10 11 12 13 14 15 16 on the Mortgaged Property.”). 17 18 19 20 21 22 23 24 Mortgage loan application by an appraiser who meets the minimum requisite qualifications by an 25
COMPLAINT– 49

4.7.43 With respect to loan #122752827 in pool 8: 4.7.43.1 The appraiser indicated the appraisal value was $840,000

however; the Mortgage Loan Schedule indicated the appraisal value was $850,000. This was a breach of the representation and warranty contained in section 3.02(a) (“The information contained in the Mortgage Loan Schedule is complete, true and correct in all material respects.”). 4.7.43.2 The Note was not signed by the borrower This was a

the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury . . . .”); section 3.02(i) (“The Mortgage Note and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms . . . .”); and section 3.02(j) (“The Mortgage is a valid, existing and enforceable first or second lien (as specified in the related Mortgage Loan Schedule)

4.7.43.3

The supervisory appraiser did not inspect the property, and

a copy of the appraiser's current license is not in the file. Applicable underwriting guidelines and proper, prudent and customary loan origination and collection practices require the supervisory appraiser to inspect the property and that the file contains a copy of the appraiser's license. This was a breach of the representations and warranties contained in section 3.02(t) (“The Credit File contains an appraisal of the related Mortgaged Property signed prior to the approval of the

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Agency for appraisers . . . .”); section 3.02(p) (“The origination and collection practices used by 1 Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, 2 3 4 5 6 7 8 9 the borrower and interviewer will sign and date the initial loan application, and verify proof of 10 11 12 13 14 15 16 and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage 17 18 19 20 21 22 23 24 proper, prudent and customary in the mortgage origination and servicing business. . . .”). 25
COMPLAINT– 50

proper, prudent and customary in the mortgage origination and servicing business. . . .”); and the representation and warranty contained in the Purchase Confirmation dated March 31, 2006, which states 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.” 4.7.43.4 American Home Mortgage's Loan Approval indicates that

delivery of the initial TIL Disclosure Statement in accordance with Reg Z. The initial signed loan application and proof of delivery for the initial TIL are not in the file. Proper, prudent and customary loan origination practices require that all of the underwriter’s 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

origination and servicing business . . . .”). 4.7.43.5 The loan officer did not sign or date the final loan

application. Proper, prudent and customary loan origination and collection practices require the loan officer to sign and date the final 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,

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4.7.44 With respect to loan #123119673 in pool 6: 1 4.7.44.1 2 3 4 5 6 7 8 9 mortgage origination and servicing business. . . .”). 10 11 12 13 14 15 16 4.7.44.3 17 18 19 20 21 22 23 24 25
COMPLAINT– 51

The Truth-In-Lending disclosure was not signed or dated.

Proper, prudent and customary loan origination and collection practices require the Truth-inLending be signed and dated. 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. . . .”) 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

4.7.44.2

The Trustee's name has not been inserted in the Deed of

Trust. Proper, prudent and customary loan origination and collection practices require the Trustee's name be inserted in the Deed of Trust. This was a breach of the representation and warranty contained in section 3.02(u) (“In the event the mortgage constitutes a Deed of Trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated. . . .”). The title policy isn't present in the loan file. Due to the

lack of a title policy, the existence of liens, proper vesting and paid taxes cannot be verified. Thus, other applicable sections of the contract may have been breached. At a minimum this was a breach of the representation and warranty 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

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exceptions contained in Section 3.02(j)(i), (ii) and (iii) above) Countrywide, its successors and 1 assigns as to the first or second priority lien of the Mortgage, as applicable. . . .”). 2 3 4 5 6 7 8 9 Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in 10 11 12 13 14 15 16 4.7.44.6 17 18 19 20 21 22 23 24 25
COMPLAINT– 52

4.7.44.4

The final application was not signed and dated by the

borrower or the loan officer, the 4506T is not signed or dated, and the HUD is not signed. Proper, prudent and customary loan origination and collection practices require the final application be signed and dated by the borrower and loan officer, the 4506T signed and dated, and the HUD signed. 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

the mortgage origination and servicing business. . . .”). 4.7.44.5 The Loan Amount was $96,600, 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 January 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” The Notice of Right to Cancel was not present in the file.

Proper, prudent and customary loan origination and collection practices require the Notice of Right to Cancel be signed and dated by the borrower and non-borrowing spouse. 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. . . .”).

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4.7.44.7 1 2 3 4 5 6 7 8 9

The borrower was self-employed, and the processor

obtained 3 reference letters instead of the business license or CPA letter. American Home Mortgage's Reduced Doc SIFA loan program guidelines require that a current business license reflecting current two year history or a CPA letter be provided for a self-employed borrower. There was no business license or CPA letter in the file. Applicable loan guidelines also provide that the assets be verified. There was no asset verification. 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 10 11 12 13 14 15 16 This was a breach of the representation and warranty contained in section 3.02(x) (“Except for 17 18 19 20 21 22 23 24 25
COMPLAINT– 53

business. . . .”); and the representation and warranty contained in the Purchase Confirmation dated January 31, 2006, which states 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.” 4.7.44.8 There was no assignment of mortgage present in the file.

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.”). 4.7.45 With respect to loan #123120121 in pool 6: 4.7.45.1 The loan balance was $210,000, which was below Fannie

Mae and Freddie Mac loan limits. This was a breach of the representation and warranty

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contained in the Purchase Confirmation dated January 31, 2006, which states that, “[e]ach 1 Mortgage Loan is a jumbo Mortgage Loan . . . .” 2 3 4 5 6 7 8 9 in the state where the Mortgaged Property is located. All such insurance policies contain a 10 11 12 13 14 15 16 137, Bennett, CO 80102”. This was a breach of section 3.02(p) (“The origination and collection 17 18 19 20 21 22 23 24 Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in 25
COMPLAINT– 54

4.7.45.2

The insurance binder indicated that the “mortgagee” was

American Brokers Conduit and did not state “its successors and/or assigns”. The property appeared to be underinsured as the minimum coverage amount was $210,000 and the binder indicated $203,300. 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 is licensed to do business

standard mortgagee clause naming Countrywide, its successors and assigns as mortgagee, and all premiums thereon have been paid.”). 4.7.45.3 The address on the loan documents and flood hazard

determination was incorrect. The address on the loan documents and flood hazard determination read: “5447 South City Road, Bennett, CO 80102” but should have read: “5447 S. County Road

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 . . . .”). 4.7.45.4 The non-borrowing spouse did not sign the truth-in-lending

disclosure statement, deed of trust or notice of right to cancel. This was a breach of section 3.02(p) (“The origination and collection practices used by Countrywide with respect to each

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the mortgage origination and servicing business . . . .”). Legal, proper, prudent and customary 1 mortgage origination practices require that the non-borrowing spouse sign the TIL, deed of trust 2 3 4 5 6 7 8 9 have been in all respects legal, proper, prudent and customary in the mortgage origination and 10 11 12 13 14 15 16 business for at least two years. The verification may be accomplished one of the following 17 18 19 20 21 22 23 24 which states that, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the 25
COMPLAINT– 55

and notice of right to cancel. 4.7.45.5 The underwriter’s loan approval was conditioned upon the

receipt of a copy of the executed second note, second HUD1, a satisfactory property location survey of the subject property, and verification of the borrower’s date of birth. These documents were not present in the loan file. This was a breach of section 3.02(p) (“The origination and collection practices used by Countrywide with respect to each Mortgage Note and Mortgage

servicing business . . . .”). Legal, proper, prudent and customary mortgage origination practices require the underwriter’s conditions to be satisfied prior to closing. 4.7.46 With respect to loan #123120961 in pool 6: 4.7.46.1 The applicable underwriting guidelines for this loan

program required that self-employed borrowers must be actively self-employed in the same

ways: (1) by producing a letter from the borrower’s CPA or an Enrolled Agent, or a letter from the borrower’s attorney, or (2) two years business license along with verification the business is currently active, or (3) three verifiable business references from suppliers verifying two years of activity including name, address, and telephone number. The borrower was self-employed, and there was only a copy of one year’s business license in the file. This was a breach of the representation and warranty contained in the Purchase Confirmation dated January 31, 2006,

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prior owner of the Mortgage Loans or Countrywide’s jumbo credit underwriting guidelines, as 1 applicable, in effect at the time of origination.” 2 3 4 5 6 7 8 9 loan officer signing and dating the final loan application. The loan officer failed to sign and date 10 11 12 13 14 15 16 prior to closing. 17 18 19 20 21 22 23 24 25
COMPLAINT– 56

4.7.47 With respect to loan #123122033 in pool 8: 4.7.47.1 The loan balance was $220,500, 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 March 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.47.2 The underwriter’s loan approval was conditioned on the

the final loan application. This was a breach of 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 . . .”). Proper, prudent and customary origination practices required the final loan application to be signed and dated by the loan officer, and the underwriter’s conditions satisfied

4.7.47.3

The underwriter’s loan approval was conditioned on

providing copies of the demand/payoff letter from GMAC, the executed second note and second HUD, and the balance owed on the hazard policy reflected on the HUD. These items were not present in the file. This was a breach of 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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Proper, prudent and customary origination practices required the underwriter’s conditions to be 1 satisfied prior to closing. 2 3 4 5 6 7 8 9 4.7.49.1 10 11 12 13 14 15 16 and customary origination practices required the underwriter’s conditions to be satisfied prior to 17 18 19 20 21 22 23 24 signed and dated by the loan officer. 25
COMPLAINT– 57

4.7.48 With respect to loan #123124130 in pool 6: 4.7.48.1 The loan balance was $227,500, 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 January 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.49 With respect to loan #123124938 in pool 8: The underwriter’s loan approval was conditioned upon the

non-borrowing vestee signing the TIL, mortgage, and notice of right to cancel. Further, there was no deed from the non-borrowing vestee. These conditions were not present in the file. This was a breach of 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 . . .”). Proper, prudent

closing. 4.7.49.2 The loan officer failed to sign and date the final loan

application. This is a breach of 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 . . .”). Proper, prudent and customary origination practices required the final loan application to be

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4.7.50 With respect to loan #123126371 in pool 9: 1 4.7.50.1 2 3 4 5 6 7 8 9 an insurer acceptable to an Agency against loss by fire, hazards of extended coverage and insurer 10 11 12 13 14 15 16 4.7.51.2 17 18 19 20 21 22 23 24 25
COMPLAINT– 58

The loan balance was $148,750, 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 April 28, 2006, which stated that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.51 With respect to loan #123128219 in pool 6: 4.7.51.1 There was no hazard insurance binder present in the file.

This is a breach of section 3.02(f) (“All buildings upon the Mortgaged Property are insured by

is licensed to do business in the state where the Mortgaged Property is located . . . .”); 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 . . .”). Proper, prudent and customary origination practices require a complete copy of the hazard insurance binder to be in the file. There was no complete appraisal or the appraiser’s current

license present in the file. This is a breach of section 3.02(t) (“The credit file contains an appraisal of the related Mortgaged Property signed prior to the approval of the Mortgage Loan application by an appraiser who meets the minimum requisite qualifications of an Agency for appraisers . . .”); 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 . . .”). Proper, prudent

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and customary origination practices require a complete copy of the appraisal and appraiser’s 1 license to be in the file. 2 3 4 5 6 7 8 9 borrower’s assets be verified. These items were not present in the file. Proper, prudent and 10 11 12 13 14 15 16 at the time of origination;” and section 3.02(p) (“The origination and collection practices used by 17 18 19 20 21 22 23 24 the underwriter’s conditions to be satisfied prior to closing. This was a breach of section 3.02(p) 25
COMPLAINT– 59

4.7.51.3

The loan balance was $179,972, 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 January 31, 2006, which stated that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.51.4 The applicable underwriting guidelines for this loan

program required that the borrower’s employment be verified for a full two years, and the

customary origination practices require the borrower’s employment to be verified for a full two years, and the borrower’s assets be verified. This was a breach of the representations and warranties contained in the Purchase Confirmation dated January 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

Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary origination practices require prudent and customary in the mortgage origination and servicing business . . . .”) 4.7.51.5 The underwriter’s loan approval was conditioned upon the

receipt of a copy of the second note, and a borrower-signed rent free explanation letter. These items were not present in the file. Proper, prudent and customary origination practices required

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(“The origination and collection practices used by Countrywide with respect to each Mortgage 1 Note and Mortgage have been in all respects legal, proper, prudent and customary in the 2 3 4 5 6 7 8 9 the mortgage origination and servicing business . . .”). 10 11 12 13 14 15 16 4.7.52.2 17 18 19 20 21 22 23 24 origination and collection practices used by Countrywide with respect to each Mortgage Note 25
COMPLAINT– 60

mortgage origination and servicing business . . .”). 4.7.51.6 There was no credit report, purchase and sale agreement or

deed present in the file. Proper, prudent and customary origination practices required the credit report, purchase and sale agreement and deed to be in the file. This was a breach of 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

4.7.52 With respect to loan #123128972 in pool 6: 4.7.52.1 There was no assignment of mortgage present in the loan

file. This was a breach of 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.”). The loan balance was $164,500, 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 January 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.52.3 The loan officer failed to sign and date the final loan

application. Proper, prudent and customary origination practices required the final loan application to be signed and dated by the loan officer. This is a breach of section 3.02(p) (“The

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 61 of 118

and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage 1 origination and servicing business . . .”). 2 3 4 5 6 7 8 9 program required that the borrower’s assets be verified. No asset verification was present in the 10 11 12 13 14 15 16 4.7.54 With respect to loan #123130732 in pool 6: 17 18 19 20 21 22 23 24 by Countrywide with respect to each Mortgage Note and Mortgage have been in all respects 25
COMPLAINT– 61

4.7.53 With respect to loan #123129804 in pool 8: 4.7.53.1 The loan balance was $232,050, 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 March 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.53.2 The applicable underwriting guidelines for this loan

file. This was a breach of 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 origination practices require prudent and customary in the mortgage origination and servicing business . . .”). Proper, prudent and customary origination practices require the borrower’s assets to be verified.

4.7.54.1

The loan balance was $130,130, 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 January 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.54.2 The loan officer failed to sign and date the final loan

application. This is a breach of section 3.02(p) (“The origination and collection practices used

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 62 of 118

legal, proper, prudent and customary in the mortgage origination and servicing business . . .”). 1 Proper, prudent and customary origination practices require the final loan application to be 2 3 4 5 6 7 8 9 customary in the mortgage origination and servicing business . . .”). 10 11 12 13 14 15 16 4.7.55 With respect to loan #123131741 in pool 6: 17 18 19 20 21 22 23 24 file. This was a breach of section 3.02(p) (“The origination and collection practices used by 25
COMPLAINT– 62

signed and dated by the loan officer. 4.7.54.3 The words “its successors and/or assigns” do not appear

after the lender’s name on the title policy. Proper, prudent and customary origination practices require the lender’s name on the title policy to state “its successors and/or assigns.” This is a breach of 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

4.7.54.4

There was no deed present in the file. Proper, prudent and

customary origination practices require the deed to be in the file. This is a breach of 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 . . .”).

4.7.55.1

The loan balance was $145,920, 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 January 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.55.2 The applicable underwriting guidelines for this loan

program required that the borrower’s assets be verified. No asset verification was present in the

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Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, 1 proper, prudent and customary origination practices require prudent and customary in the 2 3 4 5 6 7 8 9 contained in the Purchase Confirmation dated February 28, 2006, which states that, “[e]ach 10 11 12 13 14 15 16 proper, prudent and customary origination practices require prudent and customary in the 17 18 19 20 21 22 23 24 25
COMPLAINT– 63

mortgage origination and servicing business . . .”). Proper, prudent and customary origination practices require the borrower’s assets to be verified and that the underwriter’s conditions are fulfilled prior to closing. 4.7.56 With respect to loan #123132093 in pool 7: 4.7.56.1 The loan balance was $275,000, which was below Fannie

Mae and Freddie Mac loan limits. This was a breach of the representation and warranty

Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.56.2 The applicable underwriting guidelines for this loan

program required that the borrower’s assets be verified. No asset verification was present in the file. This was a breach of 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,

mortgage origination and servicing business . . .”). Proper, prudent and customary origination practices require the borrower’s assets to be verified. 4.7.56.3 The loan officer failed to sign and date the final loan

application. This is a breach of 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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Proper, prudent and customary origination practices require the final loan application to be 1 signed and dated by the loan officer. 2 3 4 5 6 7 8 9 program required that the borrower’s employment be verified. This item was not present in the 10 11 12 13 14 15 16 section 3.02(p) (“The origination and collection practices used by Countrywide with respect to 17 18 19 20 21 22 23 24 25
COMPLAINT– 64

4.7.57 With respect to loan #123471192 in pool 8: 4.7.57.1 The loan balance was $311,500, 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 March 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.57.2 The applicable underwriting guidelines for this loan

file. Proper, prudent and customary origination practices require the borrower’s employment be verified. This was a breach of the representations and warranties contained in the Purchase Confirmation dated March 31, 2006, which states 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,” and

each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary origination practices require prudent and customary in the mortgage origination and servicing business . . .”). 4.7.58 With respect to loan #123471520 in pool 6: 4.7.58.1 The loan balance was $217,500, which was below Fannie

Mae and Freddie Mac loan limits. This was a breach of the representation and warranty

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contained in the Purchase Confirmation dated January 31, 2006, which states that, “[e]ach 1 Mortgage Loan is a jumbo Mortgage Loan . . . .” 2 3 4 5 6 7 8 9 guidelines, as applicable, in effect at the time of origination,” and section 3.02(p) (“The 10 11 12 13 14 15 16 title policy. Proper, prudent and customary origination practices require the lender’s name on the 17 18 19 20 21 22 23 24 proper, prudent and customary in the mortgage origination and servicing business . . .”). 25
COMPLAINT– 65

4.7.58.2

The applicable underwriting guidelines for this loan

program and proper, prudent and customary origination practices required that the borrower’s employment be verified. No employment verification was present in the file. This was a breach of the representations and warranties contained in the Purchase Confirmation dated January 31, 2006, which states 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

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 origination practices require prudent and customary in the mortgage origination and servicing business . . .”). 4.7.58.3 The lender’s name on the title policy did not state “its

successors and/or assigns”, and the borrower’s name and marital status were not indicated on the

title policy to state “its successors and/or assigns”, and the borrower’s name and marital status to be stated on the title policy. This is a breach of section 3.02(m) (“Each Mortgage loan secured by a first priority Mortgage is covered by a lender’s title insurance policy acceptable to an Agency insuring Countrywide, its successors and assigns as to the first priority lien of the Mortgage . . . “) 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,

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4.7.59 With respect to loan #123477719 in pool 9: 1 4.7.59.1 2 3 4 5 6 7 8 9 after the lender’s name on the title policy. Proper, prudent and customary origination practices 10 11 12 13 14 15 16 have been in all respects legal, proper, prudent and customary in the mortgage origination and 17 18 19 20 21 22 23 24 which states, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the prior 25
COMPLAINT– 66

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 is a breach of 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 . . .”). 4.7.59.2 The words “its successors and/or assigns” did not appear

require the lender’s name on the title policy to state “its successors and/or assigns”. This is a breach of section 3.02(m) (“Each Mortgage loan secured by a first priority Mortgage is covered by a lender’s title insurance policy acceptable to an Agency insuring Countrywide, its successors and assigns as to the first priority lien of the Mortgage . . . “); section 3.02(p) (“The origination and collection practices used by Countrywide with respect to each Mortgage Note and Mortgage

servicing business . . .”). 4.7.59.3 The applicable underwriting guidelines for this loan

program required that the borrowers’ employment, income, and assets be verified. Proper, prudent and customary origination practices require the borrowers’ employment, income, and assets to be verified. No asset verification was present in the file. This was a breach of the representations and warranties contained in the Purchase Confirmation dated April 28, 2006,

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 67 of 118

owner of the Mortgage Loans or Countrywide’s jumbo credit underwriting guidelines, as 1 applicable, in effect at the time of origination,” and section 3.02(p) (“The origination and 2 3 4 5 6 7 8 9 Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim 10 11 12 13 14 15 16 subject to no interest or participation of, or agreement with, any other party, to sell and assign 17 18 19 20 21 22 23 24 25
COMPLAINT– 67

collection practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary origination practices require prudent and customary in the mortgage origination and servicing business . . .”). 4.7.60 With respect to loan #123479127 in pool 9: 4.7.60.1 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

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 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

each Mortgage Loan pursuant to the terms of this Agreement.”). 4.7.60.2 There was no assignment of mortgage present in the loan

file. This was a breach of 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.”). 4.7.61 With respect to loan #123480376 in pool 6:

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 68 of 118

4.7.61.1 1 2 3 4 5 6 7 8 9

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 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 10 11 12 13 14 15 16 require a PUD rider attached to the Deed of Trust if the property is located in a homeowners’ 17 18 19 20 21 22 23 24 program required that the borrower’s employment be verified. Verification of the borrower’s 25
COMPLAINT– 68

each Mortgage Loan pursuant to the terms of this Agreement.”). 4.7.61.2 The title report indicated that the property was located in a

homeowners’ association. A PUD rider was not attached to the Deed of Trust. There was also no verification if the HOA dues were current at closing and HOA dues were not included in the housing expense or prorated on the HUD1. Proper, prudent and customary origination practices

association, to verify that HOA dues are paid current, and to include HOA dues as part of housing expense. This was a breach of 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 origination practices require prudent and customary in the mortgage origination and servicing business . . .”). 4.7.61.3 The applicable underwriting guidelines for this loan

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employment was not present in the file. Proper, prudent and customary origination practices 1 require the borrowers’ employment be verified. This was a breach of the representations and 2 3 4 5 6 7 8 9 mortgage origination and servicing business . . .”). 10 11 12 13 14 15 16 Mortgage Loan. The Mortgage Loan is not assigned or pledged, and Countrywide has good and 17 18 19 20 21 22 23 24 application. Proper, prudent and customary origination practices require the final loan 25
COMPLAINT– 69

warranties contained in the Purchase Confirmation dated January 31, 2006, 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 origination practices require prudent and customary in the

4.7.62 With respect to loan #123480400 in pool 6: 4.7.62.1 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

marketable title thereto, and has full right to transfer and sell the Mortgage Loan to the Purchaser 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 this Agreement.”). 4.7.62.2 The loan officer failed to sign and date the final loan

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application to be signed and dated by the loan officer. This was a breach of section 3.02(p) 1 (“The origination and collection practices used by Countrywide with respect to each Mortgage 2 3 4 5 6 7 8 9 4.7.63 With respect to loan #123692033 in pool 9: 10 11 12 13 14 15 16 mortgage origination and servicing business . . .”). 17 18 19 20 21 22 23 24 or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect at the time of 25
COMPLAINT– 70

Note and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage origination and servicing business . . .”). 4.7.62.3 The loan balance was $307,000, 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 January 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .”

4.7.63.1

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 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

4.7.63.2

The applicable underwriting guidelines for this loan

program required the 4506T to be signed and dated by both borrowers. The 4506T was not present in the loan file. Proper, prudent and customary origination practices require the signed and dated 4506T to be in the loan file. This was a breach of the representations and warranties contained in the Purchase Confirmation dated April 28, 2006, which states, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the Mortgage Loans

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origination,” and section 3.02(p) (“The origination and collection practices used by Countrywide 1 with respect to each Mortgage Note and Mortgage have been in all respects legal, proper, 2 3 4 5 6 7 8 9 was a breach of the representation and warranty contained in section 3.02(p) (“The origination 10 11 12 13 14 15 16 both borrowers’ business licenses, and verification of the business phone numbers and business 17 18 19 20 21 22 23 24 Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect 25
COMPLAINT– 71

prudent and customary in the mortgage origination and servicing business . . .”). 4.7.63.3 The applicable underwriting guidelines for this loan

program required the borrowers’ income to be deemed reasonable and consistent with the borrowers’ occupations. There was no income documentation present in the loan file. Proper, prudent and customary origination practices require documentation in the loan file indicating the borrowers’ income was deemed reasonable and consistent with the borrowers’ occupations. This

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 . . .”). 4.7.63.4 The applicable underwriting guidelines for this loan

program required two years of verified employment for both borrowers by providing a copy of

addresses. Verification of employment for both borrowers was not present in the file.

The

employment information was incomplete on the final loan application. Proper, prudent and customary origination practices require verification of employment for both borrowers and a complete final loan application to be in the file. This was a breach of the representations and warranties contained in the Purchase Confirmation dated April 28, 2006, which states, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 72 of 118

at the time of origination,” and section 3.02(p) (“The origination and collection practices used by 1 Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, 2 3 4 5 6 7 8 9 read: 4424 Jack Pine Drive, Pequot Lakes, MN 56472. The title insurance policy indicated the 10 11 12 13 14 15 16 servicing business . . .”) and section 3.02(a) (“The information contained in the Mortgage Loan 17 18 19 20 21 22 23 24 April 28, 2006, which states, “[e]ach Mortgage Loan conforms to the jumbo underwriting 25
COMPLAINT– 72

proper, prudent and customary in the mortgage origination and servicing business . . .”). 4.7.64 With respect to loan #123704478 in pool 9: 4.7.64.1 The property address on the loan documents, appraisal,

Mortgage Loan Schedule, and final loan application were incorrect. The property address on the loan documents, appraisal, and final loan application read: 4424 Jack Pine Drive, Nisswa, MN 56468, but the address on the loan documents, appraisal, and final loan application should have

incorrect city for the property address. Proper, prudent and customary origination practices require the correct property address to be shown on the loan documents, appraisal, final loan application, and title insurance policy. This was a breach of 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

Schedule is complete, true and correct in all material respects . . .”). 4.7.64.2 The applicable underwriting guidelines for this loan

program required that the borrower’s assets be verified. Verification of the borrower’s assets was not present in the loan file, and the assets were not listed on the loan application. Proper, prudent and customary origination practices require the borrowers’ assets to be verified. This was a breach of the representations and warranties contained in the Purchase Confirmation dated

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guidelines of the prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting 1 guidelines, as applicable, in effect at the time of origination,” and section 3.02(p) (“The 2 3 4 5 6 7 8 9 Property were insured by an insurer acceptable to an Agency against loss by fire, hazards of 10 11 12 13 14 15 16 customary origination practices require prudent and customary in the mortgage origination and 17 18 19 20 21 22 23 24 income was deemed reasonable and consistent with the borrower’s occupation. This was a 25
COMPLAINT– 73

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 origination practices require prudent and customary in the mortgage origination and servicing business . . .”). 4.7.64.3 The property was underinsured as the minimum coverage

amount was $374,000 and the insurance binder indicated $330,240. This was a breach of the representation and warranty contained in section 3.02(f) (“All buildings upon the Mortgaged

extended coverage and insurer is 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.”) 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

servicing business . . .”). 4.7.65 With respect to loan #123759875 in pool 9: 4.7.65.1 The applicable underwriting guidelines for this loan

program required the borrowers’ income to be deemed reasonable and consistent with the borrower’s occupation. There was no documentation present in the loan file. Proper, prudent and customary origination practices require documentation in the loan file indicating the borrower’s

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 74 of 118

breach of the representations and warranties contained in the Purchase Confirmation dated April 1 28, 2006, which states, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of 2 3 4 5 6 7 8 9 prudent and customary origination practices require a signed deed to be in the file. This was a 10 11 12 13 14 15 16 4.7.66.1 17 18 19 20 21 22 23 24 Mae and Freddie Mac loan limits. This was a breach of the representation and warranty 25
COMPLAINT– 74

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 . . .”). 4.7.65.2 There was no signed deed present in the file. Proper,

breach of 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 origination practices require prudent and customary in the mortgage origination and servicing business . . .”). 4.7.66 With respect to loan #125163891 in pool 8: The final loan application was not present in the loan file.

Proper, prudent and customary origination practices require the final loan application to be signed and dated by the borrower and loan officer. This was a breach of 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 . . .”). 4.7.66.2 The loan balance was $236,000, which was below Fannie

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contained in the Purchase Confirmation dated March 31, 2006, which states that, “[e]ach 1 Mortgage Loan is a jumbo Mortgage Loan . . . .” 2 3 4 5 6 7 8 9 the representation and warranty contained in section 3.02(f) (“All buildings upon the Mortgaged 10 11 12 13 14 15 16 respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and 17 18 19 20 21 22 23 24 practices require the correct property address to be shown on the flood hazard determination. 25
COMPLAINT– 75

4.7.66.3

The property address was not shown on the hazard

insurance binder. The insurance premium was not shown on the HUD as being paid at closing. The property appeared to be underinsured as the minimum coverage amount was $205,000 and the insurance binder indicated $180,000. Proper, prudent and customary origination practices require the property address to be shown on the hazard insurance binder, adequate insurance coverage to be in place, and the insurance premium to be paid at closing. This was a breach of

Property were 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 insurance policies contain a standard mortgagee clause naming Countrywide, its successors and assigns as mortgagee, and all premiums thereon have been paid.”) and section 3.02(p) (“The origination and collection practices used by Countrywide with

customary origination practices require prudent and customary in the mortgage origination and servicing business . . .”). 4.7.66.4 The property address on the flood hazard determination

was incorrect. The property address on the flood hazard determination read: 10050 Cemetary Road, Pecatonica, IL 61063, but the address on the flood hazard determination should have read: 10030 Cemetary Road, Pecatonica, IL 61063. Proper, prudent and customary origination

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This was a breach of section 3.02(p) (“The origination and collection practices used by 1 Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal, 2 3 4 5 6 7 8 9 4.7.67.2 10 11 12 13 14 15 16 file. This was a breach of section 3.02(x) (“Except for the absence of recording information, the 17 18 19 20 21 22 23 24 origination and collection practices used by Countrywide with respect to each Mortgage Note 25
COMPLAINT– 76

proper, prudent and customary in the mortgage origination and servicing business . . .”). 4.7.67 With respect to loan #125163931 in pool 8: 4.7.67.1 There was no assignment of mortgage present in the loan

file. This was a breach of 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.”). The loan balance was $204,000, 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 March 31, 2006, which states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan . . . .” 4.7.68 With respect to loan #125653654 in pool 7: 4.7.68.1 There was no assignment of mortgage present in the loan

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.”). 4.7.68.2 The title report indicated that the property was located in a

homeowners’ association. A PUD rider was not attached to the Mortgage. Proper, prudent and customary origination practices require a PUD rider to be attached to the Mortgage when the property is located in a homeowners’ association. This was a breach of section 3.02(p) (“The

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 77 of 118

and Mortgage have been in all respects legal, proper, prudent and customary origination 1 practices require prudent and customary in the mortgage origination and servicing business . . .”). 2 3 4 5 6 7 8 9 4.7.69 With Respect to loan # 125665752 in pool 8: 10 11 12 13 14 15 16 4.7.70 With respect to loan # 125747327 in pool 8: 17 18 19 20 21 22 23 24 free and clear . . .”). 25
COMPLAINT– 77

4.7.68.3

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 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 . . .”).

4.7.69.1

The actual CLTV was 95% due to an undisclosed second

mortgage. The Mortgage Loan Schedule dated March 31, 2006 listed the CLTV 80%. This was a breach of the representation and warranty contained in section 3.02(a) (“The information contained in the Mortgage Loan Schedule is complete, true and correct in all material respects . . .”).

4.7.70.1

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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 78 of 118

4.7.70.2 1 2 3 4 5 6 7 8 9 a jumbo Mortgage Loan . . . .” 10 11 12 13 14 15 16 4.7.71.2

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.”). 4.7.71 With respect to loan # 125748319 in pool 8: 4.7.71.1 The loan balance was $320,800, which was below Fannie

Mae and Freddie Mac limits. 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 was

The debt-to-income ratio was 62.77%. The applicable

underwriting guidelines state that the maximum debt-to-income for this type of loan was 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.”

17 18 19 20 21 22 23 24 business . . . .”). 25
COMPLAINT– 78

4.7.72 With respect to loan # 126041934 in pool 8: 4.7.72.1 There was no signed HUD form in the file. Proper, prudent

and customary practices require a copy of the HUD form. 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 79 of 118

4.7.73 With respect to loan # 126755311 in pool 8: 1 4.7.73.1 2 3 4 5 6 7 8 9 This was a breach of the representations and warranties contained in section 3.02(e) (“The 10 11 12 13 14 15 16 and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage 17 18 19 20 21 22 23 24 dated March 31, 2006, which stated that “[e]ach Mortgage Loan conforms to the jumbo 25
COMPLAINT– 79

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 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 . . .”). 4.7.73.2 The Deed of Trust was not recorded until May 18, 2010.

Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense . . .”); 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 . . .”); and section 3.02(p) (“The origination and collection practices used by Countrywide with respect to each Mortgage Note

origination and servicing business . . .”). Proper, prudent and customary loan origination practices require the timely recording of a deed of trust. 4.7.74 With respect to loan # 126755319 in pool 8: 4.7.74.1 The debt-to-income ratio was 49.5%. The applicable

underwriting guidelines stated that the maximum debt-to-income for this type of loan was 40%. This was a breach of the representation and warranty contained in the Purchase and Confirmation

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 80 of 118

underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's jumbo credit 1 underwriting guidelines, as applicable, in effect at the time of origination.” 2 3 4 5 6 7 8 9 4.7.75 With respect to loan # 126755343 in pool 8: 10 11 12 13 14 15 16 jumbo credit underwriting guidelines, as applicable, in effect at the time of origination.” 17 18 19 20 21 22 23 24 4.7.76 With respect to loan # 126755439 in pool 8: 25
COMPLAINT– 80

4.7.74.2

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 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 . . .”).

4.7.75.1

There was no tax return in the file. The applicable

underwriting guidelines require self-employment to be verified by the most recent year’s IRS 1040. 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

4.7.75.2

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 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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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 81 of 118

4.7.76.1 1 2 3 4 5 6 7 8 9

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 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 . . .”). 4.7.77 With respect to loan # 126940550 in pool 8: 4.7.77.1 There was no verification of assets in the file. The

applicable underwriting guidelines require verification of assets for a stated income loan. This 10 11 12 13 14 15 16 Mae and Freddie Mac limits. This was a breach of the representation and warranty contained in 17 18 19 20 21 22 23 24 dated March 31, 2006, which stated that “[e]ach Mortgage Loan conforms to the jumbo 25
COMPLAINT– 81

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.” 4.7.77.2 The loan balance was $220,000, which was below Fannie

the Purchase Confirmation dated March 31, 2006, which stated that, “[e]ach Mortgage Loan was a jumbo Mortgage Loan . . . .” 4.7.78 With respect to loan # 126940678 in pool 8: 4.7.78.1 The debt-to-income ratio was 48.7%. The applicable

underwriting guidelines stated that the maximum debt-to-income for this type of loan was 40%. This was a breach of the representation and warranty contained in the Purchase and Confirmation

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 82 of 118

underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's jumbo credit 1 underwriting guidelines, as applicable, in effect at the time of origination.” 2 3 4 5 6 7 8 9 representation and warranty contained in section 3.02(a) (“The information contained in the 10 11 12 13 14 15 16 of the prior owner of the Mortgage Loans or Countrywide's jumbo credit underwriting 17 18 19 20 21 22 23 24 proper, prudent and customary in the mortgage origination and servicing business . . .”). 25
COMPLAINT– 82

4.7.78.2

The loan balance was $228,000, which was below Fannie

Mae and Freddie Mac limits. 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 was a jumbo Mortgage Loan . . . .” 4.7.78.3 The Mortgage Loan Schedule stated the property was a

Single Family Residence, but the property actually had three units. This was a breach of the

Mortgage Loan Schedule is complete, true and correct in all material respects . . .”). 4.7.78.4 The CLTV was 94.9%. The applicable underwriting

guidelines stated that the maximum CLTV for a three unit property was 90%. 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

guidelines, as applicable, in effect at the time of origination.” 4.7.78.5 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 Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,

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4.7.78.6 1 2 3 4 5 6 7 8 9

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 . . .”). 4.7.78.7 There was no credit report in the file. Proper, prudent and

customary loan origination and collection practices require a copy of the credit report. This was 10 11 12 13 14 15 16 FICO score of 700, but the underwriter listed a FICO of 693. This was a breach of the 17 18 19 20 21 22 23 24 25
COMPLAINT– 83

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 . . . .”). 4.7.78.8 The Mortgage Loan Schedule stated the Borrower had a

representation and warranty contained in section 3.02(a) (“The information contained in the Mortgage Loan Schedule is complete, true and correct in all material respects . . .”). 4.7.78.9 There was no verification of assets in the file. The

applicable underwriting guidelines require verification of assets in a full documentation loan. 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 84 of 118

underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's jumbo credit 1 underwriting guidelines, as applicable, in effect at the time of origination.” 2 3 4 5 6 7 8 9 underwriting guidelines require a minimum FICO score of 700 for this type of loan. This was a 10 11 12 13 14 15 16 4.7.80.1 17 18 19 20 21 22 23 24 25
COMPLAINT– 84

4.7.79 With respect to loan # 126941158 in pool 8: 4.7.79.1 The loan balance was $311,600, which was below Fannie

Mae and Freddie Mac limits. This was a breach of the representation and warranty contained in the Purchase Confirmation dated March 31, 2006, which stated that, “[e]ach Mortgage Loan was a jumbo Mortgage Loan . . . .” 4.7.79.2 The borrower had a FICO score of 678. The applicable

breach of the representation and warranty contained in the Purchase and 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.” 4.7.80 With respect to loan # 132635215 in pool 9: The debt-to-income ratio was 49.09%. The applicable

underwriting guidelines stated that the maximum debt-to-income for this type of loan was 40%. 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.” 4.7.80.2 The loan officer failed to sign and date the final loan

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 85 of 118

application. Proper, prudent and customary origination practices require the final loan 1 application to be signed and dated by the loan officer. This was a breach of the representation 2 3 4 5 6 7 8 9 representation and warranty contained in the Purchase Confirmation dated April 28, 2006, which 10 11 12 13 14 15 16 collection practices used by Countrywide with respect to each Mortgage Note and Mortgage 17 18 19 20 21 22 23 24 25
COMPLAINT– 85

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 . . .”). 4.7.81 With respect to loan # 132635223 in pool 9: 4.7.81.1 There was no rental income/loss verification in the file.

The applicable underwriting guidelines required such verification. This was a breach of the

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.” 4.7.81.2 There was no appraiser’s license in the file. This was a

breach of the representations and warranties contained in section 3.02(p) (“The origination and

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 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 . . .”). Proper, prudent and customary origination practices require a copy of the appraiser’s license in the file.

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4.7.81.3 1 2 3 4 5 6 7 8 9

The debt-to-income ratio was 50.67%. The applicable

underwriting guidelines stated that the maximum debt-to-income for this type of loan was 40%. 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.” 4.7.81.4 There was no tax return in the file. The applicable

underwriting guidelines require tax returns to verify Social Security and pension income. This was a breach of the representation and warranty contained in the Purchase Confirmation dated

10 11 12 13 14 15 16 the representation and warranty contained in section 3.02(p) (“The origination and collection 17 18 19 20 21 22 23 24 This was a breach of the representation and warranty contained in the Purchase Confirmation 25
COMPLAINT– 86

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.” 4.7.81.5 There was no signed 4506T in the file. Proper, prudent and

customary loan origination and collection practices require a signed 4506T. This was a breach of

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. . . .”). 4.7.82 With respect to loan # 132635879 in pool 9: 4.7.82.1 The debt-to-income ratio was 54.07%. The applicable

underwriting guidelines stated that the maximum debt-to-income for this type of loan was 40%.

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 87 of 118

dated April 28, 2006, which stated that “[e]ach Mortgage Loan conforms to the jumbo 1 underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's jumbo credit 2 3 4 5 6 7 8 9 Mortgaged Property signed prior to the approval of the Mortgage loan application by an 10 11 12 13 14 15 16 application. Proper, prudent and customary origination practices require the final loan 17 18 19 20 21 22 23 24 This was a breach of the representation and warranty contained in the Purchase and Confirmation 25
COMPLAINT– 87

underwriting guidelines, as applicable, in effect at the time of origination.” 4.7.82.2 There was no appraiser’s license 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

appraiser who meets the minimum requisite qualifications by an Agency for appraisers . . .”). Proper, prudent and customary origination practices require a copy of the appraiser’s license in the file. 4.7.83 With respect to loan # 140607489 in pool 10: 4.7.83.1 The loan officer failed to sign and date 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 . . .”). 4.7.83.2 The debt-to-income ratio was 45.24%. The applicable

underwriting guidelines stated that the maximum debt-to-income for this type of loan was 40%.

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dated September 29, 2006, which stated that each Mortgage Loan conformed to the underwriting 1 guidelines of the prior owner of the Mortgage Loans or Countrywide's credit underwriting 2 3 4 5 6 7 8 9 4.7.84 With respect to loan # 141366867 in pool 10: 10 11 12 13 14 15 16 proper, prudent and customary in the mortgage origination and servicing business . . .”). 17 18 19 20 21 22 23 24 4.7.85 With respect to loan # 141368091 in pool 10: 25
COMPLAINT– 88

guidelines in effect at the time of origination. 4.7.83.3 The Mortgage Loan Schedule dated September 29, 2006,

listed the loan as having a “6M on 80%” prepayment penalty. The Prepayment Rider to Note describes the prepayment penalty as a 5/5/5 type. This was a breach of the representation and warranty contained in section 3.02(a) (“The information contained in the Mortgage Loan Schedule is complete, true and correct in all material respects . . .”).

4.7.84.1

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 Countrywide with respect to each Mortgage Note and Mortgage have been in all respects legal,

4.7.84.2

There was no final title report or policy in the file. Proper,

prudent and customary loan origination practices require a final title report and title policy. 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 . . .”).

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 89 of 118

4.7.85.1 1 2 3 4 5 6 7 8 9

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 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 . . .”). 4.7.85.2 The Title Policy was dated May 26, 2006 but the valid

Deed of Trust was not recorded until August 4, 2006. Proper, prudent and customary loan origination practices require the title policy to be issued when the deed of trust is recorded. This

10 11 12 13 14 15 16 underwriting guidelines stated that the maximum debt-to-income for this type of loan was 38%. 17 18 19 20 21 22 23 24 instrument and the authority of the attorney-in-fact. The originator’s closing instructions 25
COMPLAINT– 89

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 . . .”). 4.7.85.3 The debt-to-income ratio was 42.35%. The applicable

This was a breach of the representation and warranty contained in the Purchase Confirmation dated September 29, 2006, which stated that each Mortgage Loan conformed to the underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's credit underwriting guidelines in effect at the time of origination. 4.7.85.4 The Deed of Trust was executed by an attorney-in-fact. The

Title Policy failed to contain affirmative coverage as to the enforceability of the security

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required that the “Title Policy must contain affirmative coverage as to the enforceability of the 1 security instrument and the authority of the attorney-in-fact.” Proper, prudent and customary 2 3 4 5 6 7 8 9 receipt in the file. The originator’s closing instructions required that the “[p]ower of attorney 10 11 12 13 14 15 16 collection practices used by Countrywide with respect to each Mortgage Note and Mortgage 17 18 19 20 21 22 23 24 origination practices require compliance with the originator’s closing instructions. This was a 25
COMPLAINT– 90

loan origination practices require compliance with the originator’s closing instructions. 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 . . .”). 4.7.85.5 There was no recorded power of attorney or recorder’s

must be recorded prior to the recording of the security instrument and a copy of the recorded form must be forwarded with closing documents. (If recorded copy is not available a copy of executed instrument and recorder’s receipt will be acceptable.)” Proper, prudent and customary loan origination practices require compliance with the originator’s closing instructions. This was a breach of the representation and warranty contained in section 3.02(p) (“The origination and

have been in all respects legal, proper, prudent and customary in the mortgage origination and servicing business . . .”). 4.7.85.6 The power of attorney failed to specifically name the

property which was the subject of the loan. The originator’s closing instructions required that the “[p]ower of attorney form should grant the authority to purchase, execute a note, and encumber real estate, naming the specific property.” Proper, prudent and customary loan

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breach of the representation and warranty contained in section 3.02(p) (“The origination and 1 collection practices used by Countrywide with respect to each Mortgage Note and Mortgage 2 3 4 5 6 7 8 9 with the originator’s closing instructions. This was a breach of the representation and warranty 10 11 12 13 14 15 16 that the signature lines have language similar to “John Doe, by and through his/her agent and 17 18 19 20 21 22 23 24 4.7.86 With respect to loan # 142226468 in pool 10: 25
COMPLAINT– 91

have been in all respects legal, proper, prudent and customary in the mortgage origination and servicing business . . .”). 4.7.85.7 There was no evidence in the file that the borrower was

alive. The originator’s closing instructions required that if a power of attorney was used the “[c]losing attorney must provide our Closing Department with evidence that Borrower is alive as of date of closing.” Proper, prudent and customary loan origination practices require compliance

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 . . .”). 4.7.85.8 Documents which the attorney-in-fact signed only had

borrower’s name printed under the signature line. The originator’s closing instructions required

attorney-in-fact, Jane Smith” when signed by an attorney-in-fact. Proper, prudent and customary loan origination practices require compliance with the originator’s closing instructions. 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 . . .”).

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 92 of 118

4.7.86.1 1 2 3 4 5 6 7 8 9

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 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 . . .”). 4.7.86.2 Many documents were executed by an attorney-in-fact.

The originator’s closing instructions required that the attorney-in-fact sign documents similar to “(Jane Doe’s signature) by (John Doe Signature) her attorney in fact.” The attorney-in-fact

10 11 12 13 14 15 16 4.7.87 With respect to loan # 142227068 in pool 10: 17 18 19 20 21 22 23 24 25
COMPLAINT– 92

failed to sign in this manner. Proper, prudent and customary origination practices require compliance with the originator’s closing instructions. 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 . . .”).

4.7.87.1

There was insufficient verification of employment in the

file. The applicable underwriting guidelines required verification of the existence of the business and the applicant’s ownership. This was a breach of the representation and warranty contained in the Purchase Confirmation dated September 29, 2006, which stated that each Mortgage Loan conformed to the underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's credit underwriting guidelines in effect at the time of origination.

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 93 of 118

4.7.87.2 1 2 3 4 5 6 7 8 9

The appraisal indicated that the Supervisory Appraiser did

not inspect the property. Proper, prudent and customary loan origination practices require the Supervisory Appraiser to inspect the property. This was a breach of the representation and warranty contained in section 3.02(t) (“The Credit File contains an appraisal of the related 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. . . . “); 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 and Confirmation 10 11 12 13 14 15 16 collection practices used by Countrywide with respect to each Mortgage Note and Mortgage 17 18 19 20 21 22 23 24 25
COMPLAINT– 93

dated September 29, 2006, which stated that each Mortgage Loan conformed to the underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's credit underwriting guidelines in effect at the time of origination. 4.7.87.3 There was no appraiser’s license in the file. This was a

breach of the representations and warranties contained in section 3.02(p) (“The origination and

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 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 . . .”). Proper, prudent and customary origination practices require a copy of the appraiser’s license in the file.

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 94 of 118

4.7.87.4 1 2 3 4 5 6 7 8 9

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 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 . . .”). 4.7.87.5 The HUD was not 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 of the representation and warranty contained in section 3.02(p)

10 11 12 13 14 15 16 This was a breach of the representation and warranty contained in the Purchase and Confirmation 17 18 19 20 21 22 23 24 of Occupancy be in the file. This was a breach of the representation and warranty contained in 25
COMPLAINT– 94

(“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. . .”). 4.7.87.6 The debt-to-income ratio was 45.47%. The applicable

underwriting guidelines stated that the maximum debt-to-income for this type of loan was 45%.

dated September 29, 2006, which stated that each Mortgage Loan conformed to the underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's credit underwriting guidelines in effect at the time of origination. 4.7.87.7 The Certificate of Occupancy was not in the file. This was

new construction, and the appraiser has indicated the appraisal was made "as is". Proper, prudent and customary loan origination and collection practices require a copy of the Certificate

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section 3.02(w) (“To the best of Countrywide's knowledge, the mortgaged property is lawfully 1 occupied under applicable law . . . .”). 2 3 4 5 6 7 8 9 all respects legal, proper, prudent and customary in the mortgage origination and servicing 10 11 12 13 14 15 16 4.7.89.1 17 18 19 20 21 22 23 24 25
COMPLAINT– 95

4.7.88 With respect to loan # 142227084 in pool 10: 4.7.88.1 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

business. . .”) and in the Purchase Confirmation dated September 29, 2006, which stated that each Mortgage Loan conformed to the underwriting guidelines of the prior owner of the Mortgage Loans or Countrywide's credit underwriting guidelines in effect at the time of origination. 4.7.89 With respect to loan # 142227508 in pool 10: 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 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 . . .”). 4.7.89.2 The Title Policy was dated June 21, 2006 but the

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rescission period did not end until June 24, 2006. Proper, prudent and customary loan 1 origination practices require that the title policy not be issued until expiration of the rescission 2 3 4 5 6 7 8 9 application. Proper, prudent and customary origination practices require the final loan 10 11 12 13 14 15 16 Trust was not recorded until July 21, 2006. Proper, prudent and customary loan origination 17 18 19 20 21 22 23 24 grantor to the borrowers. Proper, prudent and customary origination practices require only one 25
COMPLAINT– 96

period. 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 . . .”). 4.7.90 With respect to loan # 143942080 in pool 10: 4.7.90.1 The loan officer failed to sign and date 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 . . .”). 4.7.90.2 The Title Policy was dated June 12, 2006 but the Deed of

practices require the title policy be issued when the deed of trust is recorded. 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 . . .”). 4.7.90.3 The file contains two different deeds executed by the

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 97 of 118

true copy of the deed. This was a breach of the representations and warranties contained in 1 section 3.02(p) (“The origination and collection practices used by Countrywide with respect to 2 3 4 5 6 7 8 9 guidelines of the prior owner of the Mortgage Loans or Countrywide's credit underwriting 10 11 12 13 14 15 16 and warranty contained in section 3.02(p) (“The origination and collection practices used by 17 18 19 20 21 22 23 24 correct in all material respects . . .”). 25
COMPLAINT– 97

each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage origination and servicing business . . .”). 4.7.90.4 The debt-to-income ratio was 49.821%. The applicable

underwriting guidelines stated that the maximum debt-to-income for this type of loan was 40%. This was a breach of the representation and warranty contained in the Purchase and Confirmation dated September 29, 2006, which stated that each Mortgage Loan conformed to the underwriting

guidelines in effect at the time of origination. 4.7.91 With respect to loan # 143943208 in pool 10: 4.7.91.1 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

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 . . .”). 4.7.91.2 The Mortgage Loan Schedule dated September 29, 2008

listed the property as having an appraised value of $122,000. The appraiser actually valued the property at $115,000. This was a breach of the representation and warranty contained in section 3.02(a) (“The information contained in the Mortgage Loan Schedule is complete, true and

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 98 of 118

4.7.92 With respect to loan #104500780 in pool 7: 1 4.7.92.1 2 3 4 5 6 7 8 9 collection practices used by Countrywide with respect to each Mortgage Note and Mortgage 10 11 12 13 14 15 16 customary origination practices require documentation in the loan file indicating the borrowers’ 17 18 19 20 21 22 23 24 25
COMPLAINT– 98

The supervisory appraiser did not inspect the subject

property. There was no appraiser’s current license present in the file. Proper, prudent and customary origination practices require the supervisory appraiser to inspect the subject property, and a copy of the appraiser’s current license to be in the file. This was a breach of section 3.02(t) (“The credit file contains an appraisal of the related Mortgaged Property signed prior to the approval of the Mortgage Loan application by an appraiser who meets the minimum requisite qualifications of an Agency for appraisers . . .”) and section 3.02(p) (“The origination and

have been in all respects legal, proper, prudent and customary in the mortgage origination and servicing business . . .”). 4.7.92.2 The applicable underwriting guidelines for this loan

program required the borrowers’ income to be deemed reasonable and consistent with the borrowers’ occupation. There was no documentation present in the loan file. Proper, prudent and

income was deemed reasonable and consistent with the borrowers’ occupation. This was a breach of the representations and warranties contained in the Purchase Confirmation dated February 28, 2006, 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 99 of 118

and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage 1 origination and servicing business . . .”). 2 3 4 5 6 7 8 9 Confirmation dated February 28, 2006, which states, “[e]ach Mortgage Loan conforms to the 10 11 12 13 14 15 16 4.7.92.4 17 18 19 20 21 22 23 24 the mortgage origination and servicing business . . . .”). 25
COMPLAINT– 99

4.7.92.3

The applicable underwriting guidelines for this loan

program required two years of verified employment for the borrowers by providing a copy of the borrowers’ business license, and verification of the business phone number and business address. Verification of employment for the borrowers was not present in the loan file. Proper, prudent and customary origination practices require verification of employment for the borrowers. This was a breach of the representations and warranties contained in the Purchase

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 . . .”). The applicable underwriting guidelines for this loan

program required that the borrowers’ assets, needed for funds to close, be stated on the final loan application. The borrowers’ assets, needed for funds to close, were not stated on the final loan application. Proper, prudent and customary origination practices require the borrowers’ assets, needed for funds to close, to be stated on the final loan application. This was a breach of 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 100 of 118

4.7.92.5 1 2 3 4 5 6 7 8 9

There was no seller signed deed present in the loan file.

Proper, prudent and customary origination practices require the seller signed deed to be in the loan file. This was a breach of 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 . . . .”). 4.7.93 With respect to loan #78600156 in pool 3: 4.7.93.1 The final HUD1 settlement statement was not present in the

file. The purchase and sale agreement stated that if the transaction didn’t close and fund by September 29, 2004 the sales price would be increased to $148,990. Proper, prudent and

10 11 12 13 14 15 16 4.7.93.2 17 18 19 20 21 22 23 24 soil treatment report and location survey to be in the file. This was a breach of the 25
COMPLAINT– 100

customary origination practices require a copy of the final HUD1 settlement statement to be in the file. The deed of trust recorded on October 4, 2004. 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 . . .”). The loan balance was $117,550, 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 states that, “[e]ach Mortgage Loan is a jumbo Mortgage Loan and a Fixed Rate Mortgage Loan . . . .” 4.7.93.3 The applicable underwriting guidelines for this loan

program required a satisfactory soil treatment report and a location survey which were not present in the file. Proper, prudent and customary origination practices require the satisfactory

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 101 of 118

representations and warranties contained in section 3.02(p) (“The origination and collection 1 practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in 2 3 4 5 6 7 8 9 borrowing spouse were to be vested in title as husband and wife. The deed of trust indicated the 10 11 12 13 14 15 16 proper, prudent and customary in the mortgage origination and servicing business . . .”). 17 18 19 20 21 22 23 24 25
COMPLAINT– 101

all respects legal, proper, prudent and customary in the mortgage origination and servicing business. . .”) and 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.” 4.7.93.4 The application indicated that the borrower and non-

vesting as husband and wife, but the vesting on the deed and title policy was in the borrower’s name only. Proper, prudent and customary origination practices require the vesting on the deed and title policy match the vesting on the deed of trust. 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,

4.7.93.5

The non-borrowing spouse did not sign the TIL. Proper,

prudent and customary 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 . . .”).

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 102 of 118

4.7.93.6 1 2 3 4 5 6 7 8 9

The borrower’s name and property address were incorrect

on the Mortgage Loan Schedule. This was a breach of the representation and warranty contained in section 3.02(a) (“The information contained in the Mortgage Loan Schedule is complete, true and correct in all material respects”). 4.7.94 With respect to loan #85355999 in pool 2: 4.7.94.1 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

10 11 12 13 14 15 16 existence of the business; and the borrower was to write a letter of explanation as to how 17 18 19 20 21 22 23 24 business. . .”) and in the Purchase Confirmation dated May 31, 2005, which stated that, “[e]ach 25
COMPLAINT– 102

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 . . .”). 4.7.94.2 The applicable underwriting guidelines for this loan

program required a signed CPA letter verifying the borrower had been employed in the same business and at the same location for at least two years; an independent verification of the

business was generated. The CPA letter, independent verification, and letter of explanation were not present in the loan file. Proper, prudent and customary origination practices require verification of employment for the borrower to be 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 103 of 118

Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner of the 1 Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect 2 3 4 5 6 7 8 9 practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in 10 11 12 13 14 15 16 4.7.94.4 17 18 19 20 21 22 23 24 25
COMPLAINT– 103

at the time of origination.” 4.7.94.3 The applicable underwriting guidelines for this loan

program required the borrower’s income to be deemed reasonable and consistent with the borrower’s 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 representations and warranties contained in section 3.02(p) (“The origination and collection

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.” The applicable underwriting guidelines for this loan

program required a signed 4506T. The signed 4506T was not present 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 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 104 of 118

Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect 1 at the time of origination.” 2 3 4 5 6 7 8 9 customary in the mortgage origination and servicing business. . .”) and in the Purchase 10 11 12 13 14 15 16 This verbiage was not present on the title policy. This was a breach of the representations and 17 18 19 20 21 22 23 24 4.7.95 With respect to loan #90750995 in pool 2: 25
COMPLAINT– 104

4.7.94.5

The applicable underwriting guidelines for this loan

program required a signed notice-of-right to cancel. The signed notice-of-right to cancel was not present in the file. Proper, prudent and customary origination practices require the signed noticeof-right to cancel to be 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

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.” 4.7.94.6 The applicable underwriting guidelines for this loan

program required the lender’s name on the title policy to state “its successors and/or assigns”.

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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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 105 of 118

4.7.95.1 1 2 3 4 5 6 7 8 9

The applicable underwriting guidelines for this loan

program required the borrowers’ income on the final loan application to match the underwriter’s verified income. The borrowers’ income on the final loan application didn’t match the underwriter’s verified 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 10 11 12 13 14 15 16 breach of the representations and warranties contained in section 3.02(t) (“The credit file 17 18 19 20 21 22 23 24 lawfully occupied under applicable law . . . .”). 25
COMPLAINT– 105

guidelines, as applicable, in effect at the time of origination.” 4.7.95.2 The appraisal was not present in the file. The subject

property was new construction and it is unknown if a final inspection and photos were required. A certificate of occupancy/signed off building permit was not present in the file. Proper, prudent and customary origination practices require the complete appraisal to be in the file. This was a

contains an appraisal of the related Mortgaged Property signed prior to the approval of the Mortgage Loan application by an appraiser who meets the minimum requisite qualifications of an Agency for appraisers . . .”), 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(w) (“To the best of Countrywide's knowledge, the mortgaged property is

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 106 of 118

4.7.95.3 1 2 3 4 5 6 7 8 9

The applicable underwriting guidelines for this loan

program required a seller’s signed HUD1 settlement statement. The seller’s signed HUD1 settlement statement was not present in the file. Proper, prudent and customary origination practices require a signed HUD1. 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 10 11 12 13 14 15 16 practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in 17 18 19 20 21 22 23 24 guideline for this loan program was 40%. The total debt-to-income ratio for this loan was 25
COMPLAINT– 106

jumbo credit underwriting guidelines, as applicable, in effect at the time of origination.” 4.7.95.4 The applicable underwriting guidelines for this loan

program required a seller’s signed deed. The seller’s signed deed was not present in the file. Proper, prudent and customary origination practices require a signed deed. This was a breach of the representations and warranties contained in section 3.02(p) (“The origination and collection

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.” 4.7.95.5 The applicable total debt-to-income ratio underwriting

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 107 of 118

58.20%. This was a breach of the representations and warranties contained in section 3.02(p) 1 (“The origination and collection practices used by Countrywide with respect to each Mortgage 2 3 4 5 6 7 8 9 4.7.96.1 10 11 12 13 14 15 16 proper, prudent and customary in the mortgage origination and servicing business . . .”). 17 18 19 20 21 22 23 24 25
COMPLAINT– 107

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.” 4.7.96 With respect to loan #94037970 in pool 3: The title report indicated the property was governed by a

homeowner’s association. No PUD rider was attached to the mortgage. Proper, prudent and customary origination practices require a PUD rider be attached to the mortgage when the property is subject to a homeowner’s association. 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,

4.7.96.2

The appraisal did not indicate the property was located in a

PUD. The tax account number and 2004 tax amount indicated on the appraisal didn’t match the tax account number and 2004 tax amount indicated on the title report. Proper, prudent and customary origination practices require that the appraisal and title report use the same tax account number. 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 108 of 118

Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in 1 the mortgage origination and servicing business . . .”) 2 3 4 5 6 7 8 9 have been in all respects legal, proper, prudent and customary in the mortgage origination and 10 11 12 13 14 15 16 4.7.96.5 17 18 19 20 21 22 23 24 servicing business. . .”) and in the Purchase Confirmation dated August 31, 2005, which stated 25
COMPLAINT– 108

4.7.96.3

The title insurance policy was not present in the file.

Proper, prudent and customary origination practices require a title insurance policy. This is a breach of section 3.02(m) (“Each Mortgage loan secured by a first priority Mortgage is covered by a lender’s title insurance policy acceptable to an Agency insuring Countrywide, its successors and assigns as to the first priority lien of the Mortgage . . . “) and 3.02(p) (“The origination and collection practices used by Countrywide with respect to each Mortgage Note and Mortgage

servicing business . . .”). 4.7.96.4 The loan balance was $118,400, 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 and a Fixed Rate Mortgage Loan . . . .” The applicable underwriting guidelines for this loan

program required a copy of the second note and closed end mortgage to be in the file. The second note and mortgage were not present in the file. Proper, prudent and customary origination practices require a copy of the second note and closed end mortgage. 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 109 of 118

that, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the prior owner 1 of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in 2 3 4 5 6 7 8 9 origination and collection practices used by Countrywide with respect to each Mortgage Note 10 11 12 13 14 15 16 married person. Proper, prudent and customary origination practices require the vesting on the 17 18 19 20 21 22 23 24 guideline for this loan program was 38%. The total debt-to-income ratio for this loan was 25
COMPLAINT– 109

effect at the time of origination.” 4.7.96.6 The seller’s signature on the purchase and sale agreement

didn’t match the seller’s signature on the deed. The legal description and tax account number were not present on the purchase and sale agreement. Proper, prudent and customary origination practices require a consistent signature and legal description on the purchase and sale agreement. This was a breach of the representation and warranty contained in section 3.02(p) (“The

and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage origination and servicing business . . .”). 4.7.96.7 The application indicated that the borrower and non-

borrowing spouse were to be vested in title as husband and wife. The mortgage indicated the vesting as husband and wife, but the vesting on the deed was in the borrower’s name only as a

deed to match the vesting on the mortgage. 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 . . .”). 4.7.97 With respect to loan #94229028 in pool 4: 4.7.97.1 The applicable total debt-to-income ratio underwriting

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 110 of 118

46.70%. This was a breach of the representation and warranty contained in the Purchase 1 Confirmation dated September 30, 2005, which stated that, “[e]ach Mortgage Loan conforms to 2 3 4 5 6 7 8 9 prior to the approval of the Mortgage Loan application by an appraiser who meets the minimum 10 11 12 13 14 15 16 program required a signed CPA letter or business license verifying the borrower had been 17 18 19 20 21 22 23 24 have been in all respects legal, proper, prudent and customary in the mortgage origination and 25
COMPLAINT– 110

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.” 4.7.97.2 The supervisory appraiser did not inspect the subject

property. Proper, prudent and customary origination practices require the supervisory appraiser to inspect the subject property. This was a breach of the representation and warranty contained in section 3.02(t) (“The credit file contains an appraisal of the related Mortgaged Property signed

requisite qualifications of an Agency for appraisers . . .”) 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 . . .”). 4.7.97.3 The applicable underwriting guidelines for this loan

employed in the same business and at the same location for at least two years, and an independent verification of the existence of the business. The CPA letter/business license and an independent verification were not present in the loan file. Proper, prudent and customary origination practices require verification of employment for the borrower to be 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

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 111 of 118

servicing business. . .”) and in the Purchase Confirmation dated September 30, 2005, which 1 stated that, “[e]ach Mortgage Loan conforms to the jumbo underwriting guidelines of the prior 2 3 4 5 6 7 8 9 practices used by Countrywide with respect to each Mortgage Note and Mortgage have been in 10 11 12 13 14 15 16 require a signed initial application. This was a breach of the representations and warranties 17 18 19 20 21 22 23 24 25
COMPLAINT– 111

owner of the Mortgage Loans or Countrywide's jumbo credit underwriting guidelines, as applicable, in effect at the time of origination.” 4.7.97.4 The applicable underwriting guidelines for this loan

program required a signed 4506T. The signed 4506T was not present in the file. Proper, prudent and customary origination practices require the signed 4506T to be in the file. This was a breach of the representation and warranty contained in section 3.02(p) (“The origination and collection

all respects legal, proper, prudent and customary in the mortgage origination and servicing business . . .”). 4.7.97.5 The applicable underwriting guidelines for this loan

program required a signed initial loan application to be in the file. The signed initial loan application was not present in the file. Proper, prudent and customary origination practices

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 September 30, 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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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 112 of 118

4.7.97.6 1 2 3 4 5 6 7 8 9

The applicable underwriting guidelines for this loan

program required a final HUD1 settlement statement to be in the file. The final HUD1 settlement statement was not present 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 in the Purchase Confirmation dated September 30, 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 10 11 12 13 14 15 16 acceptable to an Agency insuring Countrywide, its successors and assigns as to the first priority 17 18 19 20 21 22 23 24 the representations and warranties contained in section 3.02(f) (“All buildings upon the 25
COMPLAINT– 112

origination.” 4.7.97.7 The title insurance policy was not present in the file.

Proper, prudent and customary origination practices require the title insurance policy to be in the file. This is a breach of the representations and warranties in section 3.02(m) (“Each Mortgage loan secured by a first priority Mortgage is covered by a lender’s title insurance policy

lien of the Mortgage . . . “) and 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 . . .”). 4.7.97.8 The property appeared to be underinsured as the minimum

hazard insurance coverage amount was $440,000 and the insurance binder indicated $339,900. A paid receipt for the hazard insurance premium was not present in the file. This was a breach of

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Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 113 of 118

Mortgaged Property were insured by an insurer acceptable to an Agency against loss by fire, 1 hazards of extended coverage and insurer is licensed to do business in the state where the 2 3 4 5 6 7 8 9 application. Proper, prudent and customary origination practices require the final loan 10 11 12 13 14 15 16 underwriting guidelines stated that the maximum debt-to-income for this type of loan was 40%. 17 18 19 20 21 22 23 24 application. Proper, prudent and customary origination practices require the final loan 25
COMPLAINT– 113

Mortgaged Property is located.”) 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 origination practices require prudent and customary in the mortgage origination and servicing business . . .”). 4.7.98 With respect to loan # 99127349 in pool 3: 4.7.98.1 The loan officer failed to sign and date 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 . . .”). 4.7.98.2 The debt-to-income ratio was 42.46%. The applicable

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.” 4.7.99 With respect to loan # 99126309 in pool 7: 4.7.99.1 The loan officer failed to sign and date the final loan

Nold ♦ Muchinsky PLLC
Bellevue Place, Suite 930 10500 NE 8th Street Bellevue, WA 98004 425.289.5555 FAX 425.289.6666

Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 114 of 118

application to be signed and dated by the loan officer. This was a breach of the representation 1 and warranty contained in section 3.02(p) (“The origination and collection practices used by 2 3 4 5 6 7 8 9 4.8 10 11 12 13 14 15 16 4.9 17 18 19 20 21 22 23 24 §4.01. 25
COMPLAINT– 114

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 . . .”). 4.7.99.2 The loan balance was $304,800, which was below Fannie

Mae and Freddie Mac limits. This was a breach of the representation and warranty contained in the Purchase Confirmation dated February 28, 2006, which stated that, “[e]ach Mortgage Loan was a jumbo Mortgage Loan . . . .” In addition, the MLPSA provided that Countrywide was obliged to notify

Washington Federal if it discovered any breach of a representation or warranty. Considering that nearly every delinquent loan reviewed by Washington Federal contained at least one material breach of a representations or warranty, Countrywide, in its own review of the loan files as they came delinquent, knew or should have known of the numerous breaches of representations and warranties listed above, but failed to notify Washington Federal of such breaches. In addition, there are a number of loans (approximately 30) which are already

fully foreclosed. Upon information and belief, Washington Federal alleges that such loans contained defects in the documentation and origination substantially similar to those delineated above. C. 4.9 Countrywide’s Servicing Obligations. The MLPSA provided that Countrywide was to employ procedures in accordance

with the customary and usual standards of practice of prudent mortgage servicers. MLPSA

Nold ♦ Muchinsky PLLC
Bellevue Place, Suite 930 10500 NE 8th Street Bellevue, WA 98004 425.289.5555 FAX 425.289.6666

Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 115 of 118

4.10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

The MLPSA provided that Countrywide shall make reasonable efforts, in

accordance with the customary and usual standards of practice of prudent mortgage servicers, to collect any payments due under each Mortgage Loan. MLPSA § 4.02. 4.11 Countrywide was also obligated to use reasonable efforts to foreclose upon or

otherwise comparably convert the ownership of properties securing Mortgage Loans as they come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments. MLPSA § 4.03(a). 4.12 Countrywide was obligated to manage, conserve, protect and operate each

property acquired on behalf of Washington Federal as a result of foreclosure (“REO Property”) in the same manner that it manages, conserves, protects and operates other foreclosed property for its own account, including at least one inspection annually. Countrywide was to use reasonable efforts to dispose of each REO Property as soon as possible and was obligated to sell each REO Property no later than one (1) year after title to such REO Property had been obtained, unless Countrywide determined and gave notice to Washington Federal that a longer period was necessary for the orderly disposition of the REO Property. MLPSA § 4.13(c). D. Countrywide and Bank of America’s Breaches of Servicing Obligations. 4.13 Countrywide and Bank of America have breach their Servicing Obligations by

failing to properly adhere to the industry standards and contractual obligations delineated in 19 paragraphs 4.9 to 4.12 above. 20 21 22 23 24 25
COMPLAINT– 115

4.14

Countrywide and Bank of America have continued to charge Servicing fees with

respect to Loans long after they could have any reasonable expectation that those Loans could still result in payments to Washington Federal. Moreover, Countrywide and Bank of America have continued to charge servicing fees on Loans without charging them off in excess of 180

Nold ♦ Muchinsky PLLC
Bellevue Place, Suite 930 10500 NE 8th Street Bellevue, WA 98004 425.289.5555 FAX 425.289.6666

Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 116 of 118

days and up to 270 days after delinquency, despite the industry custom and practice to the 1 contrary. 2 3 4 5 warranties referenced above to Countrywide and Bank of America and made demand 6 7 8 9 10 11 12 replace them with Qualified Substitute Mortgage Loans, as required under section 3.03 of the 13 MLPSA. 14 15 16 17 18 19 20 21 22 23 24 25
COMPLAINT– 116

E.

Countrywide and Bank of America Have Refused Washington Federal’s Repurchase Demands. 4.15 Washington Federal has given notice of breaches of the representations and

on Countrywide and Bank of America to repurchase the above Mortgage Loans pursuant to section 3.03(a) of the MLPSA. 4.16 More than 90 days have elapsed since Washington Federal gave notice of the

breaches and made demand upon Countrywide and Bank of America. Countrywide and Bank of America have refused to cure any of the breaches, purchase any of the Mortgage Loans, or

V. 5.1

FIRST CAUSE OF ACTION – BREACH OF CONTRACT

Plaintiff incorporates the allegations in the foregoing paragraphs as though fully

set forth herein. 5.2 The foregoing actions constitute a material breach of the representations and

warranties contained in the MLPSA and the associated Transaction Documents. 5.3 The foregoing actions constitute a material breach of the servicing obligations

contained in the MLPSA. 5.4 Plaintiff has performed all of the conditions, covenants and promises required to

be performed in accordance with the MLPSA and the associated Transaction Documents.

Nold ♦ Muchinsky PLLC
Bellevue Place, Suite 930 10500 NE 8th Street Bellevue, WA 98004 425.289.5555 FAX 425.289.6666

Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 117 of 118

1 2 3 4 5 6

5.5

Plaintiff is entitled to the remedy of specific performance and the repurchase of

all defaulted or charged off mortgage loans contained in each respective mortgage loan pool and a refund of the servicing fees charged for servicing performed below industry standards. 5.6 proven at trial. PRAYER FOR RELIEF WHEREFORE Plaintiff prays for relief as follows: In the alternative, Plaintiff is entitled to an award of damages, in an amount to be

7 1. 8 of the defaulted or charged off mortgage loans sold to Washington Federal at the Repurchase 9 Price specified in the MLPSA and Transaction Documents; 10 2. 11 3. 12 4. 13 14 15 16 17 18 19 20 21 22 23 24 25 For an order declaring that the failure of Countrywide and Bank of America to properly service the Loans is a material breach of the MLPSA and that Washington Federal is entitled to an award of damages in an amount equal to what is will cost to have the Loans properly serviced by a replacement entity; and 5. For an award of reasonably incurred attorney fees and costs pursuant to the For a refund of the servicing fees paid to Countrywide and Bank of America; For an award of damages in an amount to be proven at trial; For a decree of specific performance directing the Defendants to repurchase all

MLPSA, statute, common law, or other applicable standard. DEMAND FOR JURY TRIAL Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Washington Federal demands trial by jury of all issues so triable. // // // // //
COMPLAINT– 117

Nold ♦ Muchinsky PLLC
Bellevue Place, Suite 930 10500 NE 8th Street Bellevue, WA 98004 425.289.5555 FAX 425.289.6666

Case 2:12-cv-01820 Document 1 Filed 10/16/12 Page 118 of 118

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

DATED this 15th day of October, 2012. NOLD MUCHINSKY PLLC

/s/ David A. Nold David A. Nold, WSBA 19009 Thomas W. Stone, WSBA 37559 10500 NE 8th St., Ste. 930 Bellevue, WA 98004 Tel.: (425) 289-5555 Attorneys for Plaintiff Washington Federal

COMPLAINT– 118

Nold ♦ Muchinsky PLLC
Bellevue Place, Suite 930 10500 NE 8th Street Bellevue, WA 98004 425.289.5555 FAX 425.289.6666

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