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MBIA Insurance Corporation v. IndyMac ABS Inc., Home Equity Mortgage Loan Asset-Backed Trust, Series 2006-H4, Et. Al

MBIA Insurance Corporation v. IndyMac ABS Inc., Home Equity Mortgage Loan Asset-Backed Trust, Series 2006-H4, Et. Al

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Published by Foreclosure Fraud

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Published by: Foreclosure Fraud on Dec 16, 2009
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09/15/2010

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6 ] 6 49/3 1 08402.2
QUINN EMANUEL URQUHART OLIVER & HEDGES, LLP
A. William Urquhart
(
Bar No. 140996)
bilIurquhart
@
qu^nnemanuel.com
Harry AOlivar
Jr
(Bar No
143089
)
^"^^^
.
.
an
e
G
u
^
^^
^'^ ^^^ ^ ^^
^^^^
le L
ilmore (
Ba
71457
)
No
^.
^^
daniellegilmore
@
quinnemanuel.com
^^p ^ ^ 20A^
865 South Figueroa Street, 10th Floor
Los Angeles, California 90017-2543
Telephone:
(213} 443-3000^^^^ ^^^^^ tine ^^^^^^^
Facsimile
:
{
213} 443-3100
BY^RY^^^
2
4
Attorneys for Plaintiff MBIA InsuranceCorporationSUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF LOS ANGELES
^ ^ '^ ^^
MBIA INSURANCE CORPORATION, aNew York corporation,
Plaintiff,
vs.
INDYMAC ABS, INC., a
Delaware
corporation
;
HOME EQUITYMORTGAGE LOAN ASSET-BACKEDTRUST,
SERIES 2006
-
H4, a Delaware
statutory trust
;
HOME EQUITYMORTGAGE LOAN ASSET-BACKED
TRUST,
SERIES
INDS 2007-1, a
New York common
law trust; HOMEEQUITY MORTGAGE LOAN ASSET-BACKED TRUST, SERIES INDS 2007-2,
a New
York common law trust
;
CREDITSUISSE SECURITIES (USA), L.L.C., a
Delaware Iimited liability corporation;
UBS SECURITIES, LLC, a
Delaware
corporation
; JPMORGAN CHASE & CO.,
a Delaware corporation
;
MICHAEL
PERRY,
an individual
;
A. SCOTT KEYS,
an individual
; JILL JACOBSON, an
individual
;
KEVIN CALLAN, an
individual
;
and JOHN and
JANE DOES 1-
100,
Defendants.
6
7
8
9
10
11
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13
1415
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1819
20
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23
24
25
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27
28
CASE NO.
COMPLAINT FOR:
(1)
VIOLATIONS OF THECORPORATE SECURITIES LAW
(CAL, CORP. CODE §§ 25401 &
25501);
{2)
VIOLATIONS OF THECORPORATE SECURITIES LAW
{CAL. CORP. CODE § 25504);
(3)
VIOLATIONS OF THECORPORATE SECURITIES LAW
{CAL. CORP. CODE § 25504.1};
(4)
COMMON-LAW FRAUD;
{5)
NEGLIGENTMISREPRESENTATION; and
(6)
DECLARATORY RELIEF
DEMAND FOR JURY TRIAL
COMPLAFN`^'
 
Plaintiff MBIA
Insurance
Corporation {"MBIA"),
as and far its Connplaint against
2
3
^-
5
6
7
8
9
la
11
I2
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1819
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262728
Defendants IndyMac AB S, Inc
. ("
IndyMac AB S "}; Hame Equity Mortgage Loan Asset-
Backed Trust
,
Series 2006
-
H4 ("2006-H4
"),
Home Equity Mortgage Loan Asset-Backed
Trust, Series INDS 2007-1 ("INDS 2007-1 "); Hame Equity Mortgage Loan Asset-BackedTrust, Series INDS 2007-2 ("INDS 2007-2"} (the 2006-H4, INDS 2007-1 and INDS
2007
-
2 Trusts are collectively referred to herein as the
"
Trusts
"
ar the "Trust Defendants ");
Credit Suisse Securities
(USA), L.L.C. ("Credit
Suisse
"};
UBS Securities
,
LLC ("UBS}
JPMorgan Chase
&
Co., as successor to Bear Stearns
&
Ca., Inc
. ("
JPMorgan Chase"}
(Credit Suisse
,
UBS and JPMorgan Chase are collectively referred to herein as the
"Underwriter Defendants
");
Michael Perry
,
A. Scott Keys
,
JiII Jacobson and Kevin Callan
(Mr. Perry, Mr. Keys, Ms. Jacobson and Mr
.
Callan are collectively referred to herein asthe "Individual Defendants
"};
and John and Jane Does 1-100
,
alleges, on information and
belief as to all facts other than as to itself
,
as follows:
Nature of the Action
I ,
This action arises from IndyMac Bank
,
F.S.B.'s ("IndyMac Bank") and
^ IndyMac ABS's (collectively "IndyMac")
fraudulent misrepresentations and omissions of
material facts related to the sale of certain residential mortgage
-
backed securities. ^
2.
MBIA
is informed and believes that Angela Mozila and David Loeb,
cofounders of the now-notorious Countrywide Financial Corporation
("
Countrywide"),
also cofounded IndyMac Bank in or about 1985. IndyMac Bank
,
which was originally
known as Countrywide Mortgage Investment
,
was formed to purchase and coilateralize
loans from Countrywide that were too large to sell to the Federal Hame Loan Mortgage
Corporation
("
Freddie Mac") and the Federal National Mortgage Association
("
Fannie
Mae"). In or about 1997, IndyMac Bank split off from Countrywide
;
although it was no
1
IndyMac
Bank was a federal savings bank registered and existing under the laws of
the State
of California. On July
11, 2008
, the Office of Thrift Supervision ("OTS"} of theUnited
States Department
of the Treasury placed IndyMac
Bank under
the receivership ofthe FDIC pursuant to OTS Order No. 2048-24.
bIb49131089Q2.2
^^
CQMPLAINT
 
61649/3108902.2
,_ .
1
longer a Countrywide entity, IndyMac Bank continued to maintain ties with Countrywide
2 even after the split. For example, on information and belief, Mr. Loeb continued to be
3
Chairman of the Board of IndyMac, and Mr. Mozilo's children worked at IndyMac Bank
4 after its split from Countrywide.
5
3.
From at (east 2001 until at least 2007, IndyMac Bank originated or acquired
6
pools of mortgage loans that were then sold {or otherwise conveyed) to trusts created by
7 IndyMac. The trusts in turn securitized the underlying mortgage loans and issued
S
residential mortgage-backed securities {"RMBS Notes" or "Notes"} which were then sold
9 to public investors {"Note Purchasers"}.
10
4.
MBIA's claims in this action relate to the material misrepresentations and
11
omissions in connection with three securitization transactians: 2006-H4, INDS 2007-1, and
12 INDS 2007-2. As part of the securitizations, Plaintiff MBIA provided financial guaranty13 insurance in the form of guarantees of the trust obligations to make principal and interest
14
payments on the RMBS Notes involved in these transactions.
I S
5.
In late 2006 and 2007, IndyMac consistently falsely represented to the
I6 investors who purchased the RMBS Notes that IndyMac had originated the mortgage loansl7 in strict compliance with its own underwriting standards and guidelines.
I8
6.
In reality, however, IndyMac had abandoned any reasonable and prudent
19
underwriting standards. In an effort to expand its market share during the mortgage
20 lending boom, IndyMac systematically abandoned its own underwriting guidelines in
21
pursuit of increased loan originations: it knowingly loaned millions of dollars to
22 borrowers who could not afford to repay the loans, or who IndyMac personnel knew or23 should have known were including misstatements in their loan applications, often with the24 assistance and encouragement of IndyMac's employees and brokers, or who otherwise did25 not satisfy the basic risk criteria for prudent and responsible lending that IndyMac claimed
26 to use.
27
7.
IndyMac's failure to abide by its underwriting guidelines fundamentally28 changed the risk profile of the mortgage loans underlying the RIVIBS Notes from what was
2
COMPLAINT

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