Case Name: MASTR Asset Backed Securities Trust 2006-HE3
v. WMC Mortgage Corporation, Civil No. 11-2542, 2012 WL
4511065 (D. Minn. Oct. 1, 2012)
A recent federal decision out of the District of Minnesota has
caused some concern regarding the viability of breach claims after
a foreclosure sale. For the reasons discussed below, we
believe the case is unlikely to affect many CMBS breach claims,
although you should expect to see it cited frequently in the near
term.
In September 2011, the Trustee of a residential mortgage-backed
securities trust, U.S. Bank National Association, filed a
three-count lawsuit against two mortgage loan originators, WMC
Mortgage Corporation ("WMC") and EquiFirst Corporation
("EquiFirst"), for breaching various representations and
warranties when they sold loans to the Trust claiming that the
origination practices used did not comply with customary industry
standards. Two of the three counts pleaded in the Complaint
alleged breach of
