The biggest news of today may be in the attachments to the Consent Judgements agreed to by the US government, the State AGs, and the big banks. The state AGs preserve their rights to pursue their major pending cases against MERS and the banks.
The devil is always in the deatils, and this may be the most important business story of today.
IV. Claims and Other Actions Exempted from Release
Notwithstanding the foregoing and any other term of this Consent Judgment, the following claims are hereby not released and are specifically reserved:
1. Securities and securitization claims based on the offer, sale, or purchase of securities, or other conduct in connection with investors or purchasers in or of securities, regardless of the factual basis of the claim, including such claims of the state or state entities as
an owner, purchaser, or holder of whole loans, securities, derivatives or similar investments, including, without limitation, mortgage backed securities, collateralized debt obligations or structured investment vehicles, and including, but not limited to, such claims based on the following:
(a) the creation, formation, solicitation, marketing, assignment, transfer, offer, sale or substitution of securities, derivatives, or other similar investments, including, without limitation, mortgage backed securities, collateralized debt obligations, collateralized loan obligations, or structured investment vehicles;
(b) representations, warranties, certifications, or claims made regarding such securities or investments, such as representations, warranties, certifications or claims regarding origination, funding, and underwriting activities, and including the eligibility, characteristics, or quality of the mortgages or the mortgagors;
(c) the transfer, sale, conveyance, or assignment of mortgage loans to, and the purchase and acquisition of such mortgage loans by, the entity creating, forming and issuing the securities, derivatives or other similar investments relating to such mortgage loans;
(d) all servicing-, foreclosure-, and origination-related conduct, but solely to the extent that such claims are based on the offer, sale, or purchase of securities, or other conduct in connection with investors or purchasers in or of securities; and
(e) all Covered Conduct, but solely to the extent that such claims are based on the offer, sale, or purchase of securities, or other conduct in connection with investors or purchasers in or of securities.
For avoidance of doubt, securities and securitization claims based on the offer, sale, or purchase
of securities, or other conduct in connection with investors or purchasers in or of securities, that are based on any source of law, including, but not limited to, false claims acts or equivalent laws, securities laws, and common law breach of fiduciary duty, are not released.
2. Claims against a trustee or custodian or an agent thereof based on or arising out of the conduct of the trustee, custodian or such agent related to the pooling of residential mortgage loans in trusts, mortgage backed securities, collateralized debt obligations, collateralized loan obligations, or structured investment vehicles, including, but not limited to, the performance of trustee or custodial functions in such conduct.
3. Liability based on the Bank’s obligations created by this Consent Judgment.
4. Obligations relating to assurances of voluntary compliance entered into between various states and Wells Fargo, N.A. in 2010, 2011, and 2012 relating to pay option ARMs.
5. Claims raised by the Illinois Attorney General in Illinois v. Wells Fargo & Co., et al., 2009-CH-26434.
6. Claims raised in State of Connecticut v. Acordia, Inc., X10-UNYCV-
0704020455-S (currently pending before the Connecticut Supreme Court).
7. Claims raised in State ex rel. Darrell V. McGraw, Jr. v. Acordia of West Virginia,
Inc., et al. (civil action no. 05-C-115W - circuit court of Hancock County).
8. Claims raised in State of New York v. JPMorgan Chase Bank, et al., Index No. 2768/2012 (N.Y. Sup. Ct.), and any similar claims – relating to the same types of acts, practices, or conduct set forth in that lawsuit – that may be asserted in the future by the Office of the New York State Attorney General against Citigroup, Inc., Citibank, N.A., CitiMortgage, Inc., Ally Financial, Inc., GMAC Mortgage LLC, Residential Capital, LLC, or their parents, subsidiaries, or affiliates.
9. Claims and remedies raised in State of Delaware v. MERSCORP, Inc. et al. (CA- NO-6987-CS), currently pending in the Court of Chancery for the State of Delaware, and any similar claims – relating to the same types of acts, practices, or conduct set forth in that lawsuit in connection with mortgages registered in the MERS system and loans secured by such mortgages – that may be asserted in the future by the Delaware Department of Justice against Bank of America, N.A., BAC Home Loans Servicing, LP, JPMorgan Chase Bank, N.A., Chase Home Finance LLC, EMC Mortgage Corporation, Wells Fargo Bank, N.A., Citigroup, Inc., Citibank, N.A., CitiMortgage, Inc., Ally Financial, Inc., GMAC Mortgage LLC, Residential Capital, LLC, or their parents, subsidiaries, or affiliates.
10. Claims raised in Commonwealth of Massachusetts v. Bank of America, N.A., et al. (Civ. A. No. 11-4363), currently pending in the Superior Court of Massachusetts, Suffolk County.
11. Claims of any kind that the State of Utah has or may have against any person or
entity not released under this Consent Judgment, or any right that State of Utah has or may have to take law enforcement action of any kind against any person or entity not released under this Consent Judgment, including any person or entity who is or may be a co-obligor with a person or entity that is released under this Consent Judgment, all of which claims, rights and actions are expressly reserved by the State of Utah.
12. Claims against Mortgage Electronic Registration Systems, Inc. or MERSCORP, INC.
13. Claims arising out of alleged violations of fair lending laws that relate to discriminatory conduct in lending.
14. Claims of state, county and local pension or other governmental funds as investors (whether those claims would be brought directly by those pension or other
governmental funds or by the Office of the Attorney General as attorneys representing the pension or other governmental funds).
15. Tax claims, including, but not limited to, claims relating to real estate transfer
taxes.
16. Claims of county and local governments and claims of state regulatory agencies
having specific regulatory jurisdiction that is separate and independent from the regulatory and enforcement jurisdiction of the Attorney General, but not including claims of Regulators that are released herein.
17. Criminal enforcement of state criminal laws.
18. Claims of county recorders, city recorders, town recorders or other local
government officers or agencies (or, for Hawaii only, where a statewide recording system is applicable and operated by the state, claims by Hawaii; and for Maryland, where the recording system is the joint responsibility of the counties or Baltimore City and the state, claims of the counties or Baltimore City and the state), for fees relating to the recordation or registration process of mortgages or deeds of trust, including assignments, transfers, and conveyances, regardless of whether those claims would be brought directly by such local government officers or agencies or through the Office of the Attorney General as attorneys representing such local government officers or agencies.
19. Claims and defenses asserted by third parties, including individual mortgage loan
borrowers on an individual or class basis.
20. Claims seeking injunctive or declaratory relief to clear a cloud on title where the
Covered Conduct has resulted in a cloud on title to real property under state law; provided,
however, that neither the Attorneys General nor Regulators shall otherwise take actions seeking to invalidate past mortgage assignments or foreclosures in connection with loans serviced and/or owned by the Bank. For the avoidance of doubt, nothing in this paragraph 20 releases, waives or bars any legal or factual argument related to the validity of past mortgage assignments or foreclosures that could be made in support of claims not released herein, including, without limitation, all claims preserved under paragraphs 1 through 23 of Section IV of this Release.
21. Disciplinary proceedings brought by a Regulator against individual employees
with respect to mortgage loan origination conduct for misconduct or violations under state law.
22. Authority to resolve consumer complaints brought to the attention of the Bank for
resolution outside of the monitoring process, as described in Section H of the Enforcement
Terms (Exhibit E).
23. Claims against Bank for reimbursement to mortgage borrowers:
(a) That represent: (i) a fee imposed upon and collected from a mortgage
borrower by Bank and retained by Bank which fee is later determined to have been
specifically prohibited by applicable state law (an “Unauthorized Fee”), provided that
such determination of impermissibility is not predicated, directly or indirectly, on a
finding of a violation of any federal law, rule, regulation, agency directive or similar
requirement; and (ii) an actual overpayment by a borrower resulting from a clear and
demonstrable error in calculation of amounts due from said borrower; and
(b) That are subject to the following: (i) are identified in the course of a
mandatory state regulatory compliance examination commenced after the Effective Date
by the Iowa Division of Banking, Nevada Division of Mortgage Lending, New
Hampshire Banking Department, Ohio Division of Financial Institutions, or Rhode Island
Department of Business Regulation, which examination period is specifically limited to
Bank’s Covered Conduct beginning on January 1, 2011 and ending on January 1, 2012;
or (ii) are part of a state regulatory compliance examination that was open or in process
as of the Effective Date; and
(c) That are not duplicative of any prior voluntary or involuntary payment to the
affected loan borrower by Bank, whether directly or indirectly, from any State Payment
or other source.