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Investors in Securities Backed by Countrywides Subprime Loans have Right to Sue Against Loan Modification Attempts According to Latest ABI Quick Poll

Contact: John Hartgen
               (703) 739-0800
               jhartgen@abiworld.org

 

INVESTORS IN SECURITIES BACKED BY COUNTRYWIDE’S SUBPRIME LOANS HAVE RIGHT TO SUE AGAINST LOAN MODIFICATION ATTEMPTS, ACCORDING TO LATEST ABI QUICK POLL

January 14, 2009, Alexandria, Va. — Most respondents (48 percent) in a recent ABI Quick Poll agreed that investors in securities backed by Countrywide’s subprime loans have a legitimate cause of action against any attempt to modify their loans under an agreement with the state attorneys general. Thirty-eight percent of respondents “strongly agreed” and 10 percent “somewhat agreed.”

Thirty-four percent of respondents did not agree that investors in securities backed by Countrywide’s subprime loans have a legitimate right to sue against any attempt to modify their loans under an agreement with state attorneys general. Twenty-five percent “disagreed strongly” and 9 percent “somewhat disagreed” that investors in securities backed by Countrywide’s subprime mortgages had a legitimate cause of action against any attempt to modify their loans under an agreement with state attorneys general. Fifteen percent of respondents did not know or had no opinion on the issue.

The Quick Poll was based on a lawsuit filed by hedge fund Greenwich Financial Services against Countrywide Financial Corp. (Greenwich Financial Services v. Countrywide) demanding that Countrywide compensate holders of some securities backed by mortgages if the lender changed the terms of the loans. Greenwich Financial Services said that it and other investors stood to lose money if Countrywide, now part of Bank of America, modified loans under a settlement that it reached with 11 state attorneys general in October.

ABI members and members of the public were welcome to submit their response to the statement: “Investors in securities backed by Countrywide's subprime loans have a legitimate cause of action against any attempt to modify their loans under an agreement with state attorneys general (Greenwich Financial Services v. Countrywide).”

ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,700 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.