Mortgage-Backed Securities Litigation Practice

Forensic & Litigation Consulting

October 4, 2013

FTI Consulting helps financial institutions address the pressing regulatory and litigation pressures surrounding mortgage loan origination, servicing, and securitization practices. Our multi-disciplinary team brings expertise in mortgage origination and underwriting, loan servicing, MBS securitization practices, and data analysis, through experienced litigation consultants and expert testifiers.

The following summarizes the services most often requested by our clients in defending their mortgage loan origination, servicing, and securitization practices:

Mortgage Re-Underwriting

Our senior underwriters are full-time FTI Consulting employees, each with over 15 years of experience.

  • Capture of over 400 data points for each loan to facilitate specific responses to individualized allegations of defect
  • Notation of location (Production Number) of key documents in the loan file, in order to facilitate responses to plaintiff allegations of “missing documents”

Materiality Assessment

Underwriting guidelines are a sliding scale of credit, procedural, and business decisions, including:

  • Credit issues impact a borrower’s ability and willingness to pay, originator business policy does not
  • Missing documents—critical vs non-critical
  • Severity of guideline exceptions (DTI, Credit Score, or LTV/CLTV) and use of compensating factors in mitigating exceptions to guidelines

Causation Analysis

Evaluate and measure the impact of macro-economic factors on loan performance and measure the relationship, if any, between underwriting breaches and loan performance.

  • Perform “reason for default” analysis to evaluate the true “root cause” of loan non-performance
  • Analyze loan pay histories to evaluate loan performance after origination to support underwriting decisions

Plaintiff Rebuttal Analysis

  • Prepare detailed results of rebuttal review in a manner that facilitates efficient response to plaintiff’s alleged loan-level defects
  • Our ART tool facilitates both individualized allegation-level responses, as well as macro-level evaluation and responses

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