Countrywide Told it could not Pass the Buck …

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Greenwich Financial Services wins case against Countrywide Financial in the State of New York.

Greenwich Financial Services, as Plaintiff, alleged that Countrywide had no right to transfer any losses onto trusts who purchased loans from Countrywide and sold them as Securities to Investors.

As part of a class action law suit made against Countrywide by the Attorney Generals in at least 15 state, Countrywide Financial Corporation agreed to reduce payments on hundreds of mortgages that were thought to be fraudulent. The total amount of this settlement was up to $8.4 billion dollars.

In its lawsuit Greenwich Financial Services, said that any agreement to reduce payments was not something that investors had agreed to and that if there were any losses or reductions in payments to investors then Countrywide had to payoff the loans so investors would not loose money.

While we will never know who owns these bad loans the complaint states that the number of Investors could be in the thousands. When Countrywide needed money it pooled and sold loans to Trusts, these Trusts in turn sold securities( often called “certificates” which were sold in different classes or ‘tranches”)

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