WAMU "Merger": Paper Chase Part 2

Oct 24, 2016

It all comes down to the final unavoidable conclusion: Chase has been lying about its ownership of WAMU originations of residential mortgage loans and the FDIC and other government institutions and agencies are either complicit or negligent.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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The issue is the Purchase and Assumption Agreement when Chase supposedly acquired assets from the FDIC receiver for Washington Mutual (WAMU) and from the US Trustee in bankruptcy for the WAMU estate.

It seems to be saying that a condition precedent to the actual ownership of loans is that the FDIC must execute a “Receiver’s Deed” or “Receiver’s Bill of Sale.” The problem is not being right — the problem is being able to simplify this for the judge to rule on it.

From what I know and according to the FDIC receiver, no such document was ever executed. It would therefore logically follows that Chase neither purchased nor received any ownership of any debts/loans from the WAMU estate. Of course it has always been my position that at the time of the FDIC-US BKR Trustee-Chase-WAMU deal, WAMU did not own any residential mortgage loans — but that is a different story.

But like rescission and other things that seem clear on their face and even have the force of both statutory and common law behind them, lawyers continue to fabricate arguments against the plain words of the instrument. In this case they say that what was said on that instrument is irrelevant. Chase assumed ownership and liability for the loans. But of course Chase disclaimed the liability in a fiery confrontation with the FDIC.

Most of this is too abstract for the average trial judge to handle. So if they are presented with an option that removes the issue from the trier of fact, the judge makes that ruling. That way the Judge is not rocking the boat with a pronouncement that the subject loan was not backed by a receiver’s Deed or Bill of Sale. Either one could be construed as an assignment or allonge for endorsement. The lack thereof would be a judicial pronouncement that Chase has been lying about that deal starting before it was ever executed.

The issue is further obscured by two facts: (1) the original Purchase and Assumption Agreement as posted on the FDIC site for years was taken down and a replacement was inserted and (2) the FDIC is tacitly supporting Chase giving rise to the issue of void vs voidable and whether the “transaction” was ratified by the FDIC and/or by Chase who received a Power of Attorney from the FDIC as receiver for the WAMU estate.

BUT all that said, the argument is clearly present that the condition precedent with a US government agency was not met and Chase got nothing. ALSO it gives rise to the ability to ask questions in discovery that might lead to early settlements. The questions (not in proper discovery form) are:

Has Chase ever received a Receiver’s Deed or receiver’s Bill of Sale from the FDIC, as receiver for the estate of Washington Mutual
If the answer to the preceding question is yes, who has it, where are they and give us a copy.
If the answer to question #1 is no, then describe any document in which Chase received ownership of one or more loans from the Washington Mutual estate. For purposes of this question ownership means that (a) the estate of Washington Mutual contained a loan receivable account for the subject loan and then (b) Chase posted the transaction as a loan receivable on its financial statement. For purposes of this question, “Chase” includes all Chase entities, subsidiaries or affiliates.
If the answer to question #1 is that the party answering that question lacks sufficient information to give an answer, then please describe and name the person who would have such knowledge, along with their contact information.

I would also include the quote from paragraph 3.3 (Manner of Conveyance; limited warranty; Nonrecourse; etc). as follows, since they signed the document in which this paragraph is included:

“THE CONVEYANCE OF ALL ASSETS, INCLUDING REAL AN PERSONAL PROPERTY INTERESTS, PURCHASED BY THE ASSUMING BANK UNDER THIS AGREEMENT SHALL BE MADE, AS NECESSARY, BY RECEIVER’S DEED OR RECEIVER’S BILL OF SALE, “AS IS”, “WHERE IS”, WITHOUT RECOURSE AN, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, WITHOUT ANY WARRANTIES WHATSOEVER WITH RESPECT TO SUCH ASSETS, EXPRESS OR IMPLIED, WITH RESPECT TO TITLE, ENFORCEABILITY, COLLECTABILITY, DOCUMENTATION OR FREEDOM FROM LIENS OR ENCUMBRANCES (IN WHOLE OR IN PART), OR AN OTHER MATTERS.”

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The next point is the sale back to the FDIC —

The Purchase and Assumption Agreement (in its current form) basically says that any loans evidenced by forged or stolen instruments entitles Chase to sell the loans to the FDIC (presumably at par value, creating a windfall to Chase). Interesting. So there was an awareness that forged and stolen instruments were an issue when this deal was done back in 2008.

So, assuming that loans=debts, which is debatable, that leads to the following questions that are again NOT in presentable form for discovery:

Did anyone perform a review to determine whether any debts were in fact transferred to Chase?
If the answer to the preceding question is yes, then identify the party who performed such review including his/her contact information.
If the answer to question #1 is yes, please state (a) whether the subject debt was part of the review and (b) whether any determination was made as to the ownership of the subject debt.
If the answer to question #1 is yes, then please answer this question: Did anyone perform a review of the debts deemed transferred to Chase for determining whether any of the debts were based upon forged or stolen documents?
If the answer to the preceding question is yes, then identify the party who performed such review including his/her contact information.
If the answer to question #3 is yes, please state whether the subject loan was part of such review.
If the answer to the preceding question is yes, then identify the party who performed such review including his/her contact information.
If the answer to question #6 is no, please state the person or persons who decided not to perform such a review.
If the answer to question #6 is no, please state the reasons for why such a review was not executed.
Please identify the name, position, and location of the person who is custodian or otherwise in possession of “put notices” (see below) under the Purchase and Assumption Agreement.

“Puts Prior to the Settlement Date. During the period from Bank Closing to and including the Business Day immediately preceding the Settlement Date, the Assuming Bank shall be entitled to require the Receiver to purchase any Asset which the Assuming Bank can establish is evidenced by forged or stolen instruments as of Bank Closing. The Assuming Bank shall transfer all such Assets to the Receiver without recourse, and shall indemnify the Receiver against any and all claims of any Person claiming by, through or under the Assuming Bank with respect to any such Asset, as provided in Section 12.4.

Notices to the Receiver. In the event that the Assuming Bank elects to require the Receiver to purchase one or more Assets, the Assuming Bank shall deliver to the Receiver a notice (a “Put Notice”) which shall include:(i) a list of all Assets that the Assuming Ban requires the Receiver to purchase;(ii) a list of all Related Liabilities with respect to the Assets identified pursuant to (i) above; and

(iii) a statement of the estimated Repurchase Price of each Asset identified pursuant to (i) above as of the applicable Put Date.

Such notice shall be in the form prescribed by the Receiver or such other form to which the Receiver shall consent. As provided in Section 9.6, the Assuming Bank shall deliver to the Receiver such documents, Credit Files and such additional information relating to the subject the Put Notice as the Receiver may request and shall provide to the Receiver full access to all other relevant books and records.”

Purchase by Receiver. The Receiver shall purchase Loans that are specified in the Put Notice (discovery?) and shall assume Related Liabilities with respect to such Loans, and the transfer of such Loans and Related Liabilities shall be effective as of a date determined by the Receiver the Credit Files which date shall not be later than thirty (30) days after receipt by the Receiver of with respect to such Loans (the “Put Date”)