Deutsche Bank Ntc -Internal Memo

8/3/2019 Deutsche Bank Ntc -Internal Memo

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Deutsche Bank1761 East 51. Andrew PlaceSanta Ana, CA 92705-4934Tel 7142476000Fax 714 247 6009

TO: ALL I10LDERS OF RESIDENTIAL MORTGAGE BACKED SECURITIES FORWHICHDEUTSCIIE BANK NATIONAL TRUST COMPANY OR DEUTCHE BANK TRUSTCOMPANY AMERICAS ACTS AS SECURITIZATION TRUSTEEFROM: DEUTSCHE BANKTRUST NATIONAL TRUST COMPANY, AS TRUSTEE ANDDEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE (the "Trustee")Date: October 25, 20 I0

Re: Certain Allegations Regarding Loan Scrvicer Foreclosure PracticesAs widely reported in the news media, several major U.S. loan scrviccrs

reportedly have suspended certain foreclosures in some or all states due to allegations andinvestigations pertaining to alleged deficiencies in legal documents filed by them incertain foreclosure proceedings (the "Alleged Deficiencies").

The Trustee is aware of these reports and has communicated with loan serviccrsregarding the matter. Specifically, the Trustee issued, on October 8, 2010, the attachedmemorandum to all loan servicers for u.s. residential mortgage backed securities trustsfor which it acts as Trustee, among other things, demanding that servicers comply withall applicable laws relating to foreclosures. The Trustee also has communicated withcertain loan scrvicers that have announced suspensions of foreclosure activity to requestadditional information about the portfolios that they service on behalf of the trusts andthe extent, if any, to which such suspcnsions and the Alleged DeJieieneies may afTectloans held by the trusts.

The Trustee reminds investors that the governing documents for securitizationtrusts typically allow holders of a requisite percentage in principal amount of securities todirect the time, place and manner of any remedial actions by the Trustee, subject toconditions stated in the governing documents. In that regard, any such instructions orother communications concerning these issues should be directed to the Trustee at thefollowing address:Deutsche Bank National Trust Company, as trusteeDeutsche Bank Trust Company Americas, as trustee1761 East St. Andrew Place, Santa Ana, CA 92705-4934A"lTN: David Co, DirectorTelephone: (714) 247-6272email: [email protected]

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Deutsche Bank 1/11761 East St. Andrew PlaceSanta Ana, CA 92705-4934

Tel: 714-247-6000Fax: 714-247-6009

URGENT AND TIME-SENSITIVEMEMORANDUMTO:FROM:

DATE:RE:

SECURITIZATION LOAN SERVICERSDEUTSCHE BANK NATIONAL TRUSTCOMPANY, AS TRUSTEEDEUTSCHE BANK TRUSTCOMPANY AMERICAS, AS TRUSTEEOctober 8, 2010Allegations Regarding Certain Servicing Foreclosure Procedures

Each addressee of this Memorandum (the "Servicers") services mongage loans on behalfofone ormore securiti""..3.lion trusts (the "Trusts") for which Deutsche Bank National Trust Company orDeutsche Bank Trust Company Americas (collectively, "Deutsche Bank") acts as trustee (in suchcapacity, the "Trustee"). Tbis Memorandum concerns 3n urgent issue requiring yourimmediate attention. A copy or this Memorandum and all attachments should be forwardedimmediately to your Legal Department or General Counsel's office.We write to express the Trustee's serious concern regarding allegations of potential defects inforeclosure pr.lctices, procedures and/or documentation llsed by certain major loan servicersand their agents (collccth:ely, the "Alleged Foreclosure Deficiencies") tbat have been thesubject of recent media reports. This Memorandum reiterates to all Sen'icers the importanceof their duties and obligations relating to such matters.The pooling and servicing agreements or other governing documents Ibr the Trusts (collectively,the "Governing Documents") provide that the Servicer is solely responsible for the performance ofall loan-level remedial collection activity on behalfof the beneficiaries of the Trusts, including,withoUllimitation, all foreclosure activity and all maintenance and sales of resulting REOproperties. The Governing Documents typically require the Trustee to furnish the Servicer withpowers of attorney that allow the Servicer to sign documents and institute legal actions, includingforeclosure proceedings, in the name of the Trustee on behalfof the Trusts in connection with theseservicing activities. The Governing Documents also provide that the Trustee shall not beresponsible for the acts or omissions of the Servicer, including acts or omissions relating to the useor misuse of such powers 0 f attorney.As the Trustee has advised on more than one occasion, all Scrviccrs and their agcnts (including anysubscrvicers, subcontractors and professionals engaged by Servicers and/or by their agents) must

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Memorandum to ServicersOctober 8, 2010Page 2 of3conduct all servicing activities, including foreclosure proceedings, in accordance with theGoverning Documents and all applicable laws. Please review again, in particular, the Trustee'smemoranda to all Servicers dated August 30, 2007 and July 28, 2008 (the "Prior Memoranda"),copies ofwhich are enclosed.Recent media reports suggest the Alleged Foreclosure Deficiencies may include the execution andfiling by certain Serviccrs and/or their agents of potentially defective documents, possiblycontaining alleged untrue assertions of fact, in connection with certain foreclosure proceedings.The reported scope of such alleged practices raises the possibility that such documents may havebeen filed in connection with foreclosure proceedings relating to mortgage loans owned by theTrusts and may have been executed under color of one or more powers of attorney granted toServicers pursuant to thc Governing Documents. Any such actions by a Servicer or its agentswould constitute a breach of that Servicer's obligations under the Governing Documents andapplicable law,In light ofthese recent developments, the Trustee demands that each Servicer (including its agents),immediately:

>- Inform the Trustee of: (i) any Alleged Foreclosure Deficiencies relating tomortgage loans serviced by tbe Servicer on behalfof the Trusts; and (ii) anysuspensions by the Servicer of foreclosure proceedings relating to mortgageloans serviced by the Senicer on behalfof the Trusts due to any such AllegedForeclosure Deficiencies.>- Cease and desist from taking any unlawful or improper action with respect tothe servicing ofTrust assets, including, but not limited to, making any false ormisleading statements in any filing, notice, document or paper of any kind.

Cease and desist from executing any document on behalf of the Trustee or onbehalfof any Trust, under any power of attorney or otherwise, unless and untilthe Servicer and its agents have: (a) verified that all statements in suchdocument are true, complete and correct; and (b) determined that the executionand filing of such document are in full compliance with all applicable laws,rules and regulations, including all applicable rules of court.;.. Cease and desist from executing any document in a manner that indicates orsuggests that the signatory is an officer or employee of the Trustee. 1>- Require each of its agents to comply wHh the foregoing demands and all legal

requirements applicable to any sen'ices that they perform on behalfof theTrusts.Please be advised the Trustee will require each Serviccr to indemnify and hold harmlessDcutS('he Bank, individually and in its capacity as Trustee, the Trusts and the investors in theI The requirement that Scrvicers execute and file documents in a manner thaI properly describes their representativecapacity was addressed specifically in the Prior Memoranda.


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Memorandum to ServicersOctober 8, 2010Page 3 of3Trusts from alI liability, loss, cost and expense of any kind (including atto.-neys' fees andcosts) arising directly or indirectly from any Alleged Foreclosure Deficiencies or from anyother alleged acts or omissions of the Servicer andior its agents relating to any servicingactivities in breach or violation of the Governing Documents andlor applicable law, including,without limitation, any liability, loss, cost or expense arising from any related legalproceedings and government or regulatory iD'\!estigations. The cost of any suchindemnification and any remedial actions by a Servicer in respect of any Alleged ForeclosureDeficiencies or any other servicing activities in breach or violation of the GoverningDocuments andlor applicable law must be paid by the Servicer out of its own funds andshould not be charged by any Servieer against any Trust. The Trustee reserves, and docs notwaive, any other rights or remedies that it andlor the Trusts may have under theGo\'crningDocuments regarding these matters.All correspondence and questions regarding this matter should be directed to David Co, Dire


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Deutsche Bank1161 Etit St Andrc-w MlIClrSanti An:, CA 9 ! ' J 0 S . . 4 9 ~Tel 1142476000Fa.: 1142476009MEMORANDUM

TO: SECURITIZATION LOAN SERVICERSFROM: DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEEDEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEEDATE: July 28, 2008RE: Advisory Concerning Servicing Issues Affecting Securitized Housing AssetsEach addressee of this Memorandum services mortgage loans on behalfof one or moresecuritization trusts (the "Trusts") for which Deutsche Bank National Trust Company orDeutsche Bank Trust Company Americas act as trustee (the "Trustee"). Thismemorandum focuses on certain issues relating to servicing practices that have come tothe attention of the Trustee since the issuance of its Memorandum to Securitization LoanScrvicers dated August 3D, 2007 (the "First Servicer Memorandum"---eopy enclosed).Because the issues addressed in the First Serviccr Memorandum continue to be relevantin the current servicing environment, theTrustee respectfully requests that all servicersreview the First ServicerMemorandum and adhere to the practices that it describes, aswell as those described in this Memorandum.The continued distressed state ofrcsidential real estate markets has placed increasedburdens on all parties involved in the loss mitigation process, including servicingpersonnel, third-party contractors and professionals engaged by servicers, governmentagencies, and borrowers. In addition, the increased numbers of delinquencies andforeclosures, and resulting financial losses, have led 10 a climate in which thepcrfonnance of securitization parties is being scrutinized carefully by variousconstituencies.Against this background. the Trustee therefore asks that all servicers servicing loans onbehalfof the Trusts remain particularly mindful of the following issues.(1) Foreclosure Procedures: Proof o f ~ O w n e r s h i p " of Loans. As stated in the FirstServicer Memorandum, servicers must exercise diligence to assure that they conduct al iforeclosures and other actions with respect to REO propcrties (including actions affectingtenants of such properties) in compliance with all fedcral, state, and local laws, rules,regulations and court procedures. In recent months, it has been reported that thc numberof contested foreclosure proceedings has substantially increased nationwide. In the

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SecuritizatioD ScrvicersJuly 28, 2008Page 2 of 4context of these adversarial proceedings, some courts are demanding that the partyseeking to foreclose prove "ownership" and other particulars of loans earlier in theproceedings. and with more exacting standards ofproof, than has previously beencustomary. Other courts are evaluating the propriety of various other servicing,foreclosure, and workout practices, Because Joan serviccrs have contractual obligationsto handle workouts and foreclosures in compliance with law and in accordance withindustry standards, they must make sure that all servicing personnel and professionalshandling foreclosures on behalfof the Trusts, including legal counsel retained byscrvicers, fully understand and comply with these changing standards and legalrequirements. Failure 10 do so may result in servicer liability to the Trusts for lossescaused by delays or, in some situations, forfeiture of collateral.Tn this regard, the Trustee is concerned that servicers make clear to their servicingpersonnel and other professionals, including legal counsel retained by servicers, thatsecuritization trusts typically become the owners of, and take title to, mortgage loans attbe time tbe securitization trusts are formed. While the use of powers of attorney tocomplete recorded chains oftit!e may be appropriate in some circumstances, servicersmust take care not to confuse the record regarding the time at which securiti7.ation trustsactually first obtain legally enforceable rights in the mortgage loans. Servicers mustensure that loss mith::ation personnel and professionals engaeed bv scrvicers.includin2 Iq:,al counsel retained bv sen'icers. understand the mechanics of rele"antsecuritization transaetioos. and related custodial practices. in sufficient detail toaddress such quest ions in a t imel" and accurate manner, In particular, servicingprofessionals must become sufficiently familiar with the terms of the relevantsecuritization documents for each Trust for which they act to explain and,wberenecessarY, prove those terms and the resulting ownership interests to courts andgmrernment agencies,(2) Proper Description of the Scrvicer, the Trustee and their Roles in Proccedings.Servicers act for the benefit ofthe Trusts. and in the name ofthc Trustcc, but are notthemselves the Trustee. Servicing professionals and other agents engaged by servicershave adopted widely varying approaches to identifying the source of their authority,Some say they represent "the servicer," others say they represent "the trustee" or "thetrust," and some simply say they represent "the bank" or "the lender," These disparatepractices have caused significant confusion regarding the roles of the parties tosecuritization transactions, The Trustee believes that all persons retained by the servkershould accurately identify the specific role or capacity in which they are acting, Forexample, an attomey for a servicer foreclosing on a property mongaged to asecuritization Trust would be less accurate in this respect ifhe or she claimed to be"[Name], Anomey for [Name ofTrustee)." A more accurate statement would be"[Name], Anomey for [Serviccr Name], Acting for [Name ofTrustee] as Trustee of the[Name ofTrustl", In no event should servicer-retained foreclosure professionals,including counsel, mislead third parties, including couns, into believing that the Trusteedirectly controls the foreclosure process or any related litigation process. In addition, theTrustee should never be described as the party who "made" or is in "in the business of


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Securitization Sen'icersJuly 28, 2008Page 3 of4makinglsecuritizing"ioans. Such descriptions inaccurately reflect the role ofasecuritization trustee and may expose the Trusts and the Trustee to unwarranted legalliability and expense.(3) Maintenance of REO Properties. The Trustee has received a number of inquiriesand complaints from government officials and community groups about the physicalcondition of REO properties. Such inquiries and complaints also are receiving increasingattention from the media, law enforcement agencies, and courts. Under standardsecuritization documentation. loan serviceMl are expresslv responsible fo r managingall aspects of the REO disposition process, includinl! appropriate maintenance ofREO properties. Failure to fulfill these responsibilities may expose the Trusts tofinanciallosscs, potentially depressing the value of Trust property and exposing theTrusts to legal and financial liability. Because title to REO properties typically includesthe name of the Trustee institution, these failures also expose the Trustee to legal claimsand reputational hann. To protect against such consequences, which are likely to giverise to indemnification claims against servicers, the Trustee urges servicers to exerciseheightened diligence with respect to REO maintenance and disposition. In addition, weurge Servicers to engage property managers who will take proactive steps to protect REOproperties, especially when they are vacant for extended periods of time.(4) Tracking and Engaging in Public-Private Initiatives. The Trustee urges servicersto stay abreast of and, where appropriate, participate in, governmental policy discussionsand rule-making processes that may affect servieing activities. Given the widespreadmisunderstanding of how securitization transactions work, servicers, trustees, and otherfinancial institutions involved in the administration of securitization transactions shouldseek to educate others appropriately about the rights and responsibilities of the parties tothese transactions. Without adequate understanding and sensitivity to these issues,officials may adopt rules or policies that adversely affect the interests of securitizationinvestors. Active participation in government-industry discussions of these issues mayhelp avert such outcomes. Shortly after the issuance of the First Servicer Memorandum,federal and state banking regulators issued their "Statement on Loss Mitigation Strategiesfor Servicers of Residential Mortgages." In addition, in December 2007, the AmericanSecuritization Forum, in consultation with U.S. Treasury officials. promulgated the"Streamlined Foreclosure and Loss Avoidance Framework for Securitized SubprimeAdjustable Rate Mortgage Loans." Both ofthesc documents reflect the kind of carefulbalancing of policy objectives and contract rights that can be achieved by engaging inresponsible substantive discussions with affected constituencies. In addition, the Trusteeurges servicers to exercise diligence and, where appropriate, involve or cooperate withlaw enforcement agencies regarding a variety of unethical and, in some cases, illegal realestate transaction schemes targeting distressed borrowers. In particular, servicers shouldbe on the lookout for third parties who: (a) seek private data concerning borrowers, loansor loan portfolios without proper authorization or (b) purport to act based on an assertedaffiliation or association with the servicer, the Trustee or the Trusts. Such practices maysubject borrowers, servicers, the Trustee and the Trusts to fmancial and reputationalhann.


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Securitization ServicersJuly 28, 2008Page 4 or4

The Trustee believes that adherence to the foregoing recommendations on a consistentbasis will not only protect the interests of investors, but benefit all constituencies byminimizing misunderstandings that impede timely and fair resolution of foreclosurematters.Thank you for your cooperation.DEUTSCHE BANK NATIONAL TRUST COMPAt"IT, as TrusteeDEUTSCHE BANK TRUST COMPANYAMERICAS, as Trustee


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Deutsche Bilnk1761 East St. A Pl8reSantll.-.n.. CA 92705-4934Tlrl 71


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SecurltizatioD ServicersPaI:e 2011the realization ofvalue on the Trusrs' mortgage loans and REO properties. Suchreluionsbips may result in crutive solutions (including. where appropriate, considerationof ~ a l e s of REO properties to non-profit or government sponsored organizations) thatrrolce the impact of foreclosures on neighborhoods. enhancing the value of Trust assets;c) To the extent permitted by applicable securitization documents. exercise sounddiscretion in evaluating 'whether or not eviction ofteoants otherwise lawfully occupyingTruit REO properties will maximize the realization of value onTrust assets; ifevictionwill not enhance the marketability or resale value ofTrusr REO properties. maintainingOCC'..tpancy may prest:r'\-c affected neighborhoods and thereby support the value of REOproperty; andd) At all times properly identify your representative capacity, as servicer, and DBNTC'sor DBTCA's capacity"as Trustee of [insert name of relevant Trostr in all notices,plemtings. com:spondence or other documents relating to the mongage loans. REOpro;xrties and other Trust assets. Title to properties should never be held, and noticescon:cmingproperties should never be issued, in DB!\'TC's or DeTCA's name withoutidelltification of our trustee capacity.We belie..-e that these "good housekeeping" principles can help create a ""inwin"situation for investors and communities, and provide a. model for harmonizing corporateresponsibilitywith our lega.I duty to protect the interests of securities investors.A t t l ~ t i v e n e s s to goveromenJ:a.1 and community coocems about the impacts of foredosureand eviction activities on neighborhoods promotes healthy, stable communities and maym;u:imize the value of Trust assets in those neighborhoods and reduce remedial costs.Thi;, approach is also consistent with the federal financial institutions regulatoryagC'Jcies' April 18.2007, Statement on Worlcing with Mortgage Borrowers:l

The federal financial institutions regulatory agencies encourage financialinstitutions to work oonstrUctiYely with residential borrowers who are financiallyunable to make their contractual payment obligations on their home loans.Prudent workout arrangements that are Consistent with safe and sound lendingpractices generally in the long-tenn best interest of both the financialinstitution and the borrower.

In ceder to help facilitate implementation of this approach, the Trustee is prepared topanicipate with s ~ i c e r s in ongoing public dialogue with public officials andconununity groups in an effort to address the concerns that they have: raised.Thank you for your cooperation.DE7rsCHE BANKNATIONAL mUST COMPANY, as TrusteeDE-JTSCHEBANKTRUSTCOMPANY A . ~ 1 E R 1 C A S . as TrusteeI T b fede:a.l ful.anciaJ institutiOn5 R:ulatory q:ce:es I l l : the Board ofOovemors orthe fcdcn:1 ~ e 1 " eS)'St.:m, tlll:: FeduaJ. Deposit msunnce Corporatioc, the National Cn:ditUnion Ac!ministntion, the Officeoitl:e Comptroller oCttleCUn"e:Dey, and the O ofThrift S 1 J p e r v ~ O f t .

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