Certified Forensic Loan Auditors, LLC

 
  Upcoming Classes

Search CFLA's Article Archive:

Goldman Sachs Can't Shake Fraud Lawsuit

courthousenews.comApril 17, 2013

By Rose Bouboushian

(CN) - Goldman Sachs cannot dismiss Prudential's claims that it falsely represented more than $375 million in residential mortgage-backed securities in its offering materials, a federal judge ruled in New Jersey.

In September 2007, New Jersey-based Prudential Insurance and five investment subsidiaries held about $13.5 billion in residential mortgage-backed securities (RMBS) and $241.1 billion in total investments.

From 2004 to 2008, Goldman Sachs & Co. bought and pooled mortgage loans and underwrote and sold more than $375 million worth of RMBS to Prudential, according to U.S. District Judge Susan Wigenton's history of the case.
In 2006 and 2007, Goldman Sachs created and underwrote 93 RMBS and 27 mortgage-related collateralized debt obligations, totaling about $100 billion.

In August 2012, Prudential demanded $270 million from Goldman Sachs, $183 million from Nomura Securities, and $343 million from RBS Financial Products fka Greenwich Capital, in separate complaints involving residential mortgage-backed securities.

In those complaints, in Essex County Court, Prudential claimed that Goldman Sachs' offering materials "did not reflect what Goldman Sachs knew regarding the true characteristics of Prudential's investments."

Goldman Sachs materially misrepresented underwriting standards and practices, due diligence, owner-occupancy, appraisal processes, loan-to-value ratios, assignments to the trusts, credit ratings, underwriting exceptions, and degree of risk, according to the amended complaint.

The case was removed to Federal Court, and Prudential amended its complaint, alleging common law aiding and abetting and equitable fraud; negligent misrepresentation; and New Jersey RICO violations. It sought rescission and damages.

Goldman sought dismissal in December, but Wigenton denied the motion last week, finding that Prudential sufficiently pled its fraud and RICO claims.

"First, plaintiffs allege several specific statements relating to defendants' alleged material misrepresentations," Wigenton wrote. "For example, plaintiffs contend that defendants abandoned their underwriting guidelines despite representing to investors that due diligence was conducted on the mortgage originators and loan underwriting guidelines before purchasing the loans for securitization. Additionally, plaintiffs provided detailed factual allegations in their amended complaint relating to defendants' misrepresentations of owner-occupancy statistics, [loan-to-value] LTV and [combined loan-to-value] CLTV rations, and transfer of title. Based on plaintiffs' own analysis of the mortgage loans which revealed misrepresentations by 'large margins,' plaintiffs contend that 'it is impossible to believe Goldman could have conducted this due diligence on the mortgage loans in the pools without concluding that a very high percentage of the mortgage loans in the pools did not comply with the underwriting standards disclosed in the offering materials.' Plaintiffs also extensively allege reliance on defendants' 'representations and assurances regarding the quality of the mortgage collateral underlying the certificates' and subsequent damages. Accordingly, the court finds that plaintiffs adequately pled a cause of action for fraud in its amended complaint."

Goldman owed a duty of care to Prudential, as it allegedly "made representations and assurances for plaintiffs' benefit and guidance knowing that plaintiffs would rely on the information," Wigenton wrote.
She deferred ruling on whether New Jersey or New York law applies to the case.

"In order to appropriately weigh each state's contacts in the context of this case, this court will benefit from acquiring further details regarding - for instance - where the alleged misrepresentations were made, where the alleged misrepresentations were relied on, defendants' actions outside New York, plaintiffs' actions outside New Jersey, and locations of meetings and/or transactions among the parties," Wigenton wrote. "Thus, this court will defer its choice-of-law decision until the parties present a full factual record."


Back to April 2013 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:


 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

ALB Law Firm

 

Advocate Legal

 

The True News Network

 

Sutton Law Firm, P.L.L.C.

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Phone: 832-932-3951
Toll Free: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.

 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2007-2016 Certified Forensic Loan Auditors ™ All rights reserved