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March 2016 Remittance – More Observations

In today’s commentary, we introduce a new term: Insured AVM. Don’t feel bad if you have never heard of this phrase. What is an Insured AVM? Upon the liquidation of a mortgaged property, if the Insured AVM is determined by a retroactive appraisal to have overstated the mortgaged property’s value as of the date originally made, the AVM Insurer is liable for the lesser of (i) losses of principal and (ii) the amount by which the Insured AVM overstated the mortgaged property’s value at origination. Sounds too good to be true? Actually, YES. Unfortunately, it appears the AVM Insurer never paid out all or some of the claims and lawyers had to get involved so investors could recover their money. We are not exactly certain about all the facts as we could not locate the actual Settlement Agreement. We see no evidence of any AVM Insurer proceeds were ever received by the Trust. We are also not certain if this settlement is for all the claim money or if some deal was struck for a partial payment. The settlement cash seems light. However, we are certain that $14,937,803.57 was paid out to 37 different AMSI deals and some lawyers made quite a bit of money arranging for the settlement.

We also discovered three more deals called this month, one which doesn’t make sense if we follow the Optional Termination clause in the Prospectus Supplement.

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