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The Trial is over

U.S. Bank as Trustee of MARM 2006-OA2, MARM 2007-1 and MARM 2007-2 against UBS Real Estate Securities Inc.

This is fascinating reading. Please don’t leave this in your inbox. We made it both educational and quite interesting.


· This is an action for breach of contract stemming from UBS Real Estate’s alleged failure to abide by its contractual obligations under the PSAs relating to the Transactions.

· On September 6, the United States District Court Southern District of NY, on 13 of 20 loans presented at a bench trial, found UBS obligated to repurchase the loan or, if it has been liquidated, then to pay the Trust the money damages equivalent.

· The Plaintiff presented 20 sample loans before the Court. With over 9,000 allegedly defective loans to choose from, the Plaintiff included two current loans, one a perfect pay in San Francisco and another a near perfect pay. An additional loan was paid in full back in August 2007, five years before the complaint was filed.

· The Plaintiff’s Expert alleges that there are over 9,000 defective loans. These loans are now headed to a team of special masters for further review. The sheer volume proves that the process “cannot be effectively and timely addressed” by the available resources in the District Court. Therefore, the Court will appoint a master to “hold trial proceedings and make or recommend findings of fact on issues to be decided without a jury.

· The “timely entry of findings of fact and conclusions of law relating to all loans not covered by the rulings herein” (9,000+ loans) sounds very expensive and very time consuming. As the costs of this process will be equally shared by both sides, both sides may be motivated to just settle. If they don’t settle, then the case will surely move over to the Court of Appeals.

· We have included both the Amended Complaint and the Memorandum & Order.

Contact us at 203-276-0672 to become a client and access all reports and attachments.

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