Nomura Asset Acceptance Corp. Alternative Loan Trust v Nomura Credit & Capital, Inc.

Nomura Asset Acceptance Corp. Alternative Loan Trust v Nomura Credit & Capital, Inc.

Opinion

DECISION/ORDER

This action is brought by Nomura Asset Acceptance Corporation Alternative Loan Trust, Series 2006-84 (Trust), by its Trustee suing on behalf of the holders of residential mortgage backed securities (RMBS) Certificates, against defendant Nomura Credit & Capital, Inc. (Nomura), the seller of the mortgage loans that were securitized. The action arises out of Nomura's alleged breach of contract, based on its failure to repurchase defective loans from the Trust. Nomura moves to dismiss the complaint pursuant to CPLR 3211 (a) (1), (5), and (7).

The process by which mortgages are securitized has previously been discussed by this court and will not be repeated here. (See HSH Nordbank AG v Barclays Bank PLC, 42 Misc. 3d 1231[A], 2014 NY Slip Op 50290[U], 2014 WL 841289 [2014] [HSH Nordbank].) The securitization at issue involved 4,712 mortgage loans with an aggregate principal balance of approximately $254 million. (Compl., ¶ 23.) On September 28, 2006, Nomura sold the mortgage loans to an affiliate, Nomura Asset Acceptance  [**2]  Corp. (NAAC), the depositor for the securitization, pursuant to a Mortgage Loan Purchase Agreement (MLPA), dated September 1, 2006. (Compl., ¶ 23,  [*2] Ex. B.) Nomura and NAAC, along with various servicers and the Trustee, entered into a Pooling and Servicing Agreement (PSA) with Wells Fargo Bank, N.A., the Securities Administrator, dated "as of September 1, 2006," by which Nomura and NAAC sold the loans to the Trust. (Compl., ¶ 24, Ex. A.)

The MLPA and PSA set forth numerous specific representations and warranties about the mortgage loans, including representations about their quality and characteristics. The representations recited in Section 8 of the MLPA (Mortgage Representations) include that the information provided to the rating agencies is true and correct; no fraud has taken place in the origination of the loans; all requirements of federal and state law have been complied with in all material respects; there are no material defaults in the mortgages or mortgage notes; the mortgage file contains an appraisal by a qualified appraiser which satisfied the standards of Fannie Mae and Freddie Mac; and no loan has a combined loan-to-value ratio exceeding 100%.

MLPA § 9 provides that the representations and warranties contained in Section 8 "shall inure to the benefit of any assignee, transferee or designee of the Purchaser [NAAC],  [*3] including the Trustee for the benefit of the Certificateholders." The PSA expressly incorporates the representations of MLPA § 8. Section 2.03 (b) of the PSA thus provides: "The Seller [Nomura] hereby represents and warrants ... as of the Closing Date: ... (vii) The representations and warranties set forth in Section 8 of the Mortgage Loan Purchase Agreement are true and correct as of the Closing Date."

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