Litigation Support

BPA has provided expert witness support for plaintiffs and defendants in large-scale, complex litigation for over a decade.  BPA executives have significant deposition and testimony experience in federal and state court, US Bankruptcy Court (both Chapter 11 and Chapter 7 cases), US Tax Court, and the American Arbitration Association. We use a “deep dive” approach, and strive to be objective and thorough, yet neutral.

The majority of our recent work has been in the mortgage finance, auto finance, private student loans, and charged-off receivables sectors.  Our recent work involves loan portfolios and factors that have affected their performance and often the performance of securitization residuals:

  • Loan origination quality and compliance with representations and warranties
  • Loan servicing quality
  • Third party performance
  • Economic and unemployment impact
  • Declining property values
  • Securitization and asset-based lending facility structure, and
  • Inappropriate professional and corporate conduct

 

Performance is usually measured using BPA proprietary risk scales, industry and deal-specific metrics, valuations, and damage amounts – frequently at retroactive dates. 

We work with large, sometimes troubled portfolios - often testing and risk-rating subjects of interest through statistical sampling. Sample sizes of loan origination reviews and servicing reviews have reached several thousand loans.

Loan portfolios are usually held in securitized form, as whole loans, and in asset-based lending facilities.  We also value securitization residuals.

Our expert witness support is grounded in “real world” asset management work.  Analyses, reports, and testimony are designed to be thorough and well-supported, to “connect the dots,” and to be understandable to lay individuals.

Recent litigation topics include:

  • Valuation of whole loans, charged-off receivables, securitization residuals and mezzanine tranches at current and retroactive dates
  • Loan servicing quality and compliance with pooling and servicing agreements
  • Put-back evaluations - compliance of loan underwriting to guidelines and representations and warranties; Financial statement reporting of securitization residual valuations
  • Private student loans
  • Asset-based lending
  • Inappropriate professional and corporate conduct, and
  • Most asset locations in the USA with some in Canada, Europe, and Latin America

 

Examples of BPA expert witness cases include:

Holding company v publicly held mortgage banking firm

  • Issues – alleged misrepresentation of the value of 15 non-prime mortgage securitization residuals contributed in an exchange, resulting in overstated residual values claimed in an SEC registration statement
  • What BPA did – performed valuation of securitization residuals and related assets.  Became asset manager for holding company; supervised three servicers; sold most residuals. Subsequently became fact witness and then expert witness for the holding company.  Underlying loan portfolio $3+ billion
  • Deposition and testimony – BPA management was deposed four times, both as fact witness and as expert witness

Class action case v financial services company

  • Issues – management misrepresented the value of residuals and subordinated certificates in over 100 securitizations, overstated asset values in public filings and in investor presentations
  • What BPA did – fast-track engagement; evaluated servicing compliance with pooling and servicing agreements; evaluated the impact of non-standard servicing actions on securitization portfolio cash flows and residual valuations; evaluated impact of undisclosed corporate guarantees on residual cash flows and valuation levels; compared the company business model to industry norms; quantified damage amounts; wrote an expert report
  • Deposition and testimony – BPA management was deposed. The case settled prior to trial

Mortgage warehouse lender v E&O carrier

  • Issues – errors and omissions policy claim had been denied relative to certain mortgage loan transactions that should have been covered
  • What BPA did – performed a representation and warranty review of a selected sample of mortgage loans. For each loan determined the specific nature of defective underwriting, quantified damages, and wrote an expert report
  • Deposition and testimony – BPA management was deposed as an expert witness. The case settled prior to trial

Mortgage loan investor v mortgage loan seller 

  • Issues – mortgage loan investor resold loans it purchased from a seller; then was forced to repurchase many loans due to seller breaches of representations and warranties
  • What BPA did – performed a representation and warranty review of a selected sample of mortgage loans.  For each loan determined the specific nature of defective underwriting, quantified damages, and wrote an expert report
  • Deposition and testimony – BPA management was deposed as an expert witness. The case settled prior to trial

 

Contact Us

For additional information on Litigation Support, please contact:

Scott Calahan at 954-832-3553 or scalahan@bostonportfolio.com