Wells under fire over legacy RMBS trust issues
Legal wrangling over crisis-era US RMBS took another turn this week, following trustee Wells Fargo’s decision to hold on to $94m of investor proceeds from $540m of called bonds to fund legal costs relating to RMBS lawsuits. The move has shocked the market and prompted Fitch Ratings to put $2.2bn of similar bonds on rating watch negative, writes David Bell.
Investors suffered losses in June when $540m of pre-crisis RMBS bonds across 20 deals were called at par by New Residential Investment Corp, but trustee Wells Fargo held on to $94m to set up a reserve to pay potential legal costs.
Several Pimco funds have already challenged the legality
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