Some REMICs do not contain a PSA – they use a Trust Agreement so reading everything is essential. Sad part of these unregulated financial transactions is that many of the controlling and underpinning documents are not required to be filed. Bankruptcy Courts like New Century have ordered files to be destroyed. Why the necessity to destroy a cloud, you might ask? Oh, that’s another good chapter waiting to be written!
Securitization Issues — Throughout the trials and tribulations of pouring over thousands of documents, the same issue keeps popping up in my head. Why are attorneys claiming to rely ONLY on the Pooling and Servicing Agreement (the “PSA”) to establish REMIC failure and nothing else?
How many cases have you read in the last two years that there was strict reliance on the use of the PSA to win a foreclosure case?
I have read of very few instances that go into extreme detail in an attempt to educate a judge (unless you’re in one of the “sand states”, which got hit the hardest and well before the rest of the nation caught on), who really didn’t major in securities law (unless you happen to be “seated” somewhere in the Southern District of New York), all the while opposing counsel is objecting to entering the PSA into evidence at trial…
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