Today, Bloomberg reported on the appeal of the Massachusetts case, Ibanez, that we have discussed in prior posts. Excerpt below. Full article here.
If loans weren’t transferred properly, the banks that sponsored such trusts may have to repurchase them, Adam J. Levitin, an associate professor at Georgetown University Law Center in Washington, said in prepared testimony in the U.S. House of Representatives in November. If the problem is widespread enough, it may cost the banks trillions of dollars and make them insolvent, Levitin said. There is “a surprising lack of consensus” as to “what method of transferring notes and mortgages is actually supposed to be used in securitization and whether that method is legally sufficient,” he said.
While real-estate law varies by state, litigants may point to decisions from other jurisdictions as being persuasive. “It ties into a theme nationally,” said Professor Kurt Eggert of the Chapman University School of Law in Orange, California. “The broader theme is the argument that efficiency of transfer is more important than real-property law.”