mbia insurance corporation v. countrywide home loans inc., exhibit 70
TRANSCRIPT
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EXHIBIT 70
ILED: NEW YORK COUNTY CLERK 12/11/2012 INDEX NO. 602825/
YSCEF DOC. NO. 3970 RECEIVED NYSCEF: 12/11/
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In The Matter Of:
MBIAINSURANCE
CORPORATION
v.
COUNTRYWIDEHOMELOANS,INC.,etal
___________________________________________________
CYNTHIASIMANTEL
Vol.
3
August24,2012
_________________________________________________CONTAINS HIGHLY CONFIDENTIAL
INFORMATION
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7/30/2019 MBIA Insurance Corporation v. Countrywide Home Loans Inc., Exhibit 70
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a6984548-ea1c-495c-8b4e-555
CONTAINS HIGHLY CONFIDENTIAL INFORMATION
CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
Page 866
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
---------------------------------------x
MBIA INSURANCE CORPORATION,
Plaintiff,
- against - Index No.
COUNTRYWIDE HOME LOANS, INC., 08/60285
COUNTRYWIDE SECURITIES CORP.,
COUNTRYWIDE FINANCIAL CORP.,
COUNTRYWIDE HOME LOANS SERVICING, LP
and BANK OF AMERICA CORP.,
Defendants.
-------------------------------------- x
CONTAINS HIGHLY CONFIDENTIAL INFORMATION
VIDEOTAPED DEPOSITION OF:
CYNTHIA SIMANTEL
FRIDAY, AUGUST 24, 2012
9:08 A.M.
VOLUME III
(PAGES 866-1218)
REPORTED BY:
SUSAN NELSON
C.S.R. No. 3202
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a6984548-ea1c-495c-8b4e-555
CONTAINS HIGHLY CONFIDENTIAL INFORMATION
CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
2 (Pages 867 to 870)
Page 867
1 Videotaped deposition of CYNTHIA SIMANTEL, the
2 witness, taken on behalf of the Plaintiff, commencing
3 at 9:08 A.M., on FRIDAY, AUGUST 24, 2012, at
4 865 South Figueroa Street, Los Angeles, California,
5 before SUSAN NELSON, C.S.R. No. 3202.6
7 APPEARANCES OF COUNSEL
8
9 FOR PLAINTIFF:
10 QUINN EMANUEL URQUHART & SULLIVAN, LLP
11 BY: PETER CALAMARI, ESQ.
12 51 Madison Avenue
13 22nd Floor
14 New York, New York 10010
15 (212) 849-7000
16 -- and --
17 QUINN EMANUEL URQUHART & SULLIVAN, LLP
18 BY: RENEE BELTRANENA BEA, ATTORNEY AT LAW
19 50 California Street
20 22nd Floor
21 San Francisco, California 94111
22 (415) 875-6600
23
24
25
Page 868
1 APPEARANCE OF COUNSEL (CONTINUED):
2
3 FOR THE COUNTRYWIDE DEFENDANTS AND THE WITNESS:
4 GUNSTER
5 BY: AARON W. TANDY, ESQ.6 One Biscayne Tower
7 2 South Biscayne Boulevard
8 Suite 3400
9 Miami, Florida 33131
10 (305) 376-6000
11
12 FOR DEFENDANT BANK OF AMERICA:
13 O'MELVENY & MYERS LLP
14 BY: TAD ALLAN, ESQ.
15 400 South Hope Street
16 Los Angeles, California 90067-2899
17 (213) 430-6000
18
19 ALSO APPEARING:
20 JAMES GABRIEL, VIDEOGRAPHER
21
22
23
24
25
Page 869
1 I N D E X2 WITNESS EXAMINATION PAGE3 CYNTHIA SIMANTEL4 By Mr. Calamari 875
5 (P.M. Session) 10316 Highly Confidential Section
7 Pages 1076 to 10908
9 E X H I B I T S10 NO. PAGE DESCRIPTION11 Exhibit 751 1141 Origination Business Controls12 (CWMBIAGO0000113735-No Bates)13 (Confidential)
14 (Previously Marked)
15 Exhibit 4015 879 6/28/11 Deposition of16 Cynthia Simantel17 (CWMBIAG0000130303-3042)18 (Confidential)19 Exhibit 4016 881 2/25/11 Deposition of20 Cynthia Simantel21 (CWMBIAG0000110390-0519)
22 (Confidential)
23 Exhibit 4017 936 10/5/09 Emails, Attachment24 (CWMBIA0018627714-7735)25 (Highly Confidential)
Page 870
1 E X H I B I T S
2 NO. PAGE DESCRIPTION
3 Exhibit 4018 943 Countrywide Internal
4 Repurchase Policy
5 (CWMBIA0018538028-8036)6 (Highly Confidential)
7 Exhibit 4019 945 May 2008, February 2009 Emails
8 Repurchase Guidance Document
9 (CWMBIA0018607415-7438)
10 (Highly Confidential)
11 Exhibit 4020 964 February 2009 Emails,
12 Attachment
13 (CWMBIA00185548919-9478)
14 (Highly Confidential)
15 Exhibit 4021 992 January 2009 Emails
16 (CWMBIA0018540052-0057)
17 (Highly Confidential)
18 Exhibit 4022 1003 Investor Audit - Credit Loss
19 Monolines
20 (CWMBIA0018630449-0455)
21 (Highly Confidential)
22 Exhibit 4023 1010 Investor Audit - Monolines
23 (CWMBIA0018631116-1142)
24 (Highly Confidential)
25
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a6984548-ea1c-495c-8b4e-555
CONTAINS HIGHLY CONFIDENTIAL INFORMATION
CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
3 (Pages 871 to 874)
Page 871
1 E X H I B I T S
2 NO. PAGE DESCRIPTION
3 Exhibit 4024 1036 3/15/06 Document to Terry Wolfe
4 (CWMBIA0009458890)
5 (Confidential)6 Exhibit 4025 1049 7/15/08 Email, Repurchase
7 Process Deck
8 (CWMBIA0018536381-6395)
9 (Highly Confidential)
10 Exhibit 4026 1066 1/26/09 Email, Attachment
11 (CWMBIA00185596183-6186)
12 (Highly Confidential)
13 Exhibit 4027 1076 4/9/10 Emails, Monoline Info
14 (BACMBIAX0000430500-0534)
15 (Highly Confidential)
16 Exhibit 4028 1091 Repurchase Oversight Group
17 (BACMBIAX0000427891-7913)
18 (Confidential)
19 Exhibit 4029 1098 10/27/08 Email, Reports, Disc
20 (CWMBIA0018574938-No Bates)
21 (Highly Confidential)
22 Exhibit 4030 1102 3/2/09 Emails, Stats Report
23 (CWMBIA0018610112-0114)
24 (Highly Confidential)
25
Page 872
1 E X H I B I T S
2 NO. PAGE DESCRIPTION
3 Exhibit 4031 1106 12/29/08 Emails
4 (CWMBIA0018595925)
5 (Highly Confidential)6 Exhibit 4032 1110 4/3/09 Email Stats Report, Disc
7 (BACMBIAX0000015553-5554)
8 (Highly Confidential)
9 Exhibit 4033 1120 CMD Credit Risk Management
10 (CWMBIAG0000103488-3500)
11 (Confidential)
12 Exhibit 4034 1127 March 2006 Emails SOP/SLA Data
13 (CWMBIA001001648-1662)
14 (Confidential)
15 Exhibit 4035 1136 Summary Review: Quality Control
16 (CWMBIAG0000106281-6292)
17 (Confidential)
18 Exhibit 4036 1153 Severely Unsatisfactory
19 Analysis
20 (BUTLER00000027-No Bates)
21 (Confidential)
22 Exhibit 4037 1158 9/16/08 Emails, Attachment,
23 Disc
24 (CWMBIAB0000006104-6105)
25 (Highly Confidential)
Page 873
1 E X H I B I T S
2 NO. PAGE DESCRIPTION
3 Exhibit 4038 1178 12/21/09 Emails, 100 MBIA Final
4 Review
5 (BACMBIAX0000016370-6514)6 (Highly Confidential)
7 Exhibit 4039 1195 January 2009 Emails,
8 1/9 Meeting
9 (CWMBIA0018596053-6039)
10 (Highly Confidential)
11 Exhibit 4040 1196 November 2008 Emails
12 (CWMBIA0018594433-4435)
13 Exhibit 4041 1198 December 2008 Emails
14 (CWMBIA0018595894-5904)
15 (Highly Confidential)
16 Exhibit 4042 1201 10/13/09 Email
17 Monthly ROG Presentation
18 (BACMBIAX0000429484-9518)
19 (Confidential)
20 Exhibit 4043 1207 11/10/09 Email
21 Monthly ROG Presentation
22 (BACMBIAX0000429635-9661)
23 (Confidential)
24
25
Page 874
1 LOS ANGELES, CALIFORNIA;
2 FRIDAY, AUGUST 24, 2012;
3 9:08 A.M.
4
509:08:22 THE VIDEOGRAPHER: Here begins Volume609:08:23 Number 3, videotape number 1, in the deposition of
709:08:26 Cynthia Simantel. Today's date is August 24th, 2012.
809:08:30 The time on the video monitor is 9:08 a.m.
909:08:34 The video operator today is James Gabriel, a
1009:08:38 videographer contracted by Merrill Legal Solutions in
1109:08:40 Los Angeles through Merrill Legal Solutions in
1209:08:42 New York located at 225 Varick Street, Tenth Floor,
1309:08:47 New York, New York, 10014.
1409:08:51 Counsel, please voice-identify yourselves
1509:08:52 and state whom you represent.
1609:08:54 MR. CALAMARI: Peter Calamari -- excuse
1709:08:57 me -- Quinn Emanuel, representing MBIA.
1809:08:59 MS. BEA: Renee Bea, Quinn Emanuel,
1909:09:01 representing MBIA.
2009:09:02 MR. TANDY: Aaron Tandy, Gunster,
2109:09:05 representing the Countrywide defendants and the
2209:09:07 witness Ms. Simantel.
2309:09:09 MR. ALLAN: Tad Allan, O'Melveny & Myers,
2409:09:11 representing the Bank of America defendants.
2509:09:14 THE VIDEOGRAPHER: The court reporter today
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CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
4 (Pages 875 to 878)
Page 875
109:09:20 is Susan Nelson with Merrill Legal Solutions. Would
209:09:20 the reporter please swear in the witness.
3
4 CYNTHIA SIMANTEL,
5 having been first duly sworn, was6 examined and testified further as follows:
7
8 THE VIDEOGRAPHER: Please begin.
9
10 EXAMINATION (RESUMED)
11 BY MR. CALAMARI:
1209:09:31 Q. Ms. Simantel, did you do anything to prepare
1309:09:34 for today's deposition since the last day of your
1409:09:38 deposition?
1509:09:41 A. I did meet with counsel yesterday.
1609:09:42 Q. And for how long did you meet?
1709:09:44 A. About three-and-a-half hours.
1809:09:46 Q. And that was yesterday?
1909:09:49 A. Yes.
2009:09:50 Q. And who was present at that meeting?
2109:09:55 A. Tad Allan and Aaron Tandy and myself.
2209:09:57 Q. No one else?
2309:09:59 A. No one else.
2409:10:00 Q. Did you review any testimony of any
2509:10:04 witnesses in the case?
Page 876
109:10:07 A. I did not.
209:10:09 Q. Okay. Did you review any documents?
309:10:13 A. I did look at a few documents.
409:10:15 Q. Okay. And did any of those documents
509:10:20 refresh your recollection about events in connection609:10:21 with this matter?
709:10:22 A. No.
809:10:23 Q. Since your prior deposition in this case,
909:10:34 which was April 28th, 2011, has your employment
1009:10:39 changed in any way?
1109:10:40 A. No, it has not.
1209:10:41 Q. So you're still employed by Bank of America?
1309:10:44 A. I am, yes.
1409:10:45 Q. And have your responsibilities changed in
1509:10:48 any respect?
1609:10:48 A. No, they have not.
1709:10:49 Q. Has your title changed?
1809:10:52 A. It has not.
1909:10:53 Q. Do you still report to Mr. Schloessmann?
2009:10:57 A. That -- that has changed. My reporting
2109:11:00 structure has changed.
2209:11:01 Q. Okay. And in what way has that changed?
2309:11:04 A. John Dixon is now head of reps and warrants,
2409:11:08 and I report to Kathryn Martin, who reports to John
2509:11:12 Dixon.
Page 877
109:11:12 Q. And who is Kathryn Martin?
209:11:14 A. She is the SVP claims management executive
309:11:21 for the GSEs.
409:11:25 Q. And can you tell me a little about her
509:11:33 history? Was she employed by Bank of America prior609:11:36 to your assignment to her?
709:11:40 MR. TANDY: Objection.
809:11:42 MR. ALLAN: Mr. Calamari, may we have a
909:11:44 stipulation that any objection made by Mr. Tandy will
1009:11:47 be joined in by Bank of America?
1109:11:48 MR. CALAMARI: Yes.
1209:11:48 MR. ALLAN: Thank you.
1309:11:54 THE WITNESS: She was with Bank of America
1409:11:56 prior to me reporting to her, but she was a
1509:11:58 Countrywide employee.
1609:11:59 BY MR. CALAMARI:
1709:12:00 Q. So she is a legacy Countrywide employee?
1809:12:03 A. She is, yes.
1909:12:04 Q. That moved over to Bank of America after the
2009:12:06 merger?
2109:12:07 MR. TANDY: Objection.
2209:12:09 THE WITNESS: She was a legacy Countrywide
2309:12:11 employee. And when Bank of America and Countrywide
2409:12:14 transitioned together, she became an employee of reps
2509:12:16 and warrants, stayed an employee of reps and
Page 878
109:12:20 warrants.
209:12:20 BY MR. CALAMARI:
309:12:20 Q. Of Bank of America?
409:12:21 A. Yes. Under Bank of America, yes.
509:12:28 Q. Okay. And you mentioned that she reports in609:12:31 turn to -- I already forgot his name. Who is that?
709:12:34 A. John Dixon.
809:12:35 Q. John Dixon.
909:12:37 And can you tell me a little about
1009:12:38 Mr. Dixon's past employment?
1109:12:40 A. Mr. Dixon was a legacy Countrywide employee
1209:12:47 who then joined Bank of America.
1309:12:50 Q. And, again, that was at the time of -- of
1409:12:52 the merger?
1509:12:53 MR. TANDY: Objection.
1609:12:56 THE WITNESS: Right. He was Countrywide.
1709:12:57 And when we transitioned to Bank of America, he just
1809:12:59 stayed on with the company.
1909:13:00 BY MR. CALAMARI:
2009:13:00 Q. Okay. And in terms of people that report to
2109:13:08 you, has that changed in any way?
2209:13:12 A. Since February of -- no, it has not.
2309:13:16 Q. Okay. So the same people that you
2409:13:19 supervised since the last deposition on April 28th
2509:13:22 you still supervise?
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CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
5 (Pages 879 to 882)
Page 879
109:13:23 A. Yes, I do.
209:13:25 Q. Let me ask you to look at a few quick
309:13:29 documents. The first of these -- the first of these
409:13:41 is a transcript of testimony given in Financial
509:13:48 Guaranty Insurance versus Countrywide -- I can see609:13:54 I'm going to need my magnifying glass before this day
709:13:54 is over.
809:13:54 MR. TANDY: Countrywide Home Loans, Inc.
909:13:57 MR. CALAMARI: Thank you. Is the first name
1009:13:58 on the caption. And let me mark that as Exhibit --
1109:14:03 what was the --
1209:14:04 MS. BEA: 4015.
1309:14:04 (The document referred to was
1409:14:21 marked as Exhibit 4015.)
1509:14:21 BY MR. CALAMARI:
1609:14:21 Q. Let me ask you to take a quick look at that
1709:14:23 document that's entitled "Videotaped Deposition of
1809:14:26 Cindy Simantel," dated February 25, 2011. And it
1909:14:32 consists of pages 1 through 87 of the document.
2009:14:39 MR. TANDY: Peter, I hate to interrupt you,
2109:14:41 I think the one that you're looking at is now 4016.
2209:14:44 The one the witness has in front of her, 4015, is the
2309:14:48 FGIC transcript which was taken on June 28th, 2011
2409:14:53 and then --
2509:14:56 MR. CALAMARI: I've got the numbers
Page 880
109:14:57 backwards?
209:14:57 MR. TANDY: You do. Not -- not a big deal
309:14:59 but --
409:15:00 MR. CALAMARI: No, that's always a big deal.
509:15:02 So let's just be very careful and identify both609:15:07 documents for the record.
709:15:08 MR. TANDY: Sure.
809:15:09 MR. CALAMARI: First, 4015 is a transcript
909:15:12 of testimony given in the case of Financial Guaranty
1009:15:21 Insurance v. Countrywide --
1109:15:21 MR. TANDY: Home Loans.
1209:15:23 MR. CALAMARI: -- Home Loans, Inc. And the
1309:15:27 date of that appears to be Tuesday, June 28th, 2013.
1409:15:33 Is that --
1509:15:33 MR. TANDY: No, 2011.
1609:15:35 MR. CALAMARI: 2011. Sorry.
1709:15:36 MR. TANDY: That'd be very interesting if it
1809:15:38 was --
1909:15:38 MR. CALAMARI: So would I -- so would I. So
2009:15:40 would I. That's why I was taken aback by that.
2109:15:44 And the second one is a transcript of
2209:15:46 testimony, and that's Exhibit 4016, given in the case
2309:15:51 of Syncora Guarantee versus Countrywide Home Loans.
2409:15:53 And that one is dated February 25th, 2011. And
2509:15:58 fortunately on that one I can read the caption.
Page 881
109:15:58 (The document referred to was209:15:58 marked as Exhibit 4016.)309:15:58 BY MR. CALAMARI:409:16:05 Q. So I'll ask you these questions in tandem.
509:16:14 Do you recall giving depositions in the609:16:16 cases that these transcripts are from?709:16:17 A. Yes, I do.809:16:19 Q. And have you seen copies of these909:16:21 transcripts in the past?1009:16:22 A. I have not.1109:16:23 Q. So you've not had a chance to review these1209:16:25 transcripts?1309:16:26 A. No.1409:16:26 Q. But you do recall giving the depositions?1509:16:31 A. I do, yes.1609:16:31 Q. Okay. And do you -- is there any reason to1709:16:34 believe that anything you've said in these1809:16:37 transcripts is false or incorrect?1909:16:39 MR. TANDY: Objection.2009:16:42 THE WITNESS: No.2109:16:42 BY MR. CALAMARI:2209:16:43 Q. Okay. Did you testify truthfully, to the2309:16:44 best of your ability?2409:16:44 A. Yes.2509:16:47 Q. And that would be true for both transcripts?
Page 882
109:16:47 A. Yes.
209:16:51 Q. And is there anything that sticks out at you
309:16:53 that after the deposition you said, oh, my goodness,
409:16:56 I have to correct that?
509:16:57 A. No.609:17:00 Q. But you have not had a chance to review
709:17:03 these transcripts. Is that correct?
809:17:04 A. That's correct.
909:17:06 Q. Okay.
1009:17:07 MR. TANDY: And, Peter, I just want to make
1109:17:09 sure 'cause my copy had some highlights. Did you
1209:17:11 intend us to have the copies that have highlights?
1309:17:15 MS. BEA: No.
1409:17:15 MR. TANDY: Okay. Well --
1509:17:16 MR. CALAMARI: Mine does, too.
1609:17:18 THE WITNESS: Mine does, too.
1709:17:19 MR. TANDY: They all do.
1809:17:20 MR. CALAMARI: Okay. So we'll have to take
1909:17:21 those back.
2009:17:23 MR. TANDY: Okay.
2109:17:24 MR. CALAMARI: And we'll substitute
2209:17:25 nonhighlighted copies. And at least for the instant,
2309:17:29 I won't ask any more questions about these exhibits
2409:17:31 until we get it straightened out.
2509:17:37 MR. TANDY: I figured before you started to
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CONTAINS HIGHLY CONFIDENTIAL INFORMATION
CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
6 (Pages 883 to 886)
Page 883
109:17:39 ask the questions, I should point that out.
209:17:42 MR. CALAMARI: Okay.
309:17:59 BY MR. CALAMARI:
409:17:59 Q. Now -- now, the -- the merger of the
509:18:16 Countrywide businesses with Bank of America609:18:23 businesses took place in two steps. Is that correct?
709:18:27 MR. TANDY: Objection.
809:18:31 THE WITNESS: I'm not clear on what you're
909:18:32 asking me.
1009:18:33 BY MR. CALAMARI:
1109:18:33 Q. Okay. There was a -- a period where Bank of
1209:18:38 America had signed contracts to acquire -- to acquire
1309:18:46 Countrywide. And then there was a closing date. And
1409:18:52 after the closing date, the two entities actually
1509:18:55 came together.
1609:18:56 Do you recall that?
1709:18:57 MR. TANDY: Objection.
1809:18:59 THE WITNESS: I wasn't involved in any
1909:19:01 contract signing. I was aware that Bank of America
2009:19:07 was going to acquire Countrywide and we would
2109:19:11 transition under that umbrella. And I was aware of
2209:19:13 legal day one and that concept.
2309:19:17 BY MR. CALAMARI:
2409:19:17 Q. Okay. And -- and when you say that -- that
2509:19:22 Bank of America was going to acquire Countrywide,
Page 884
109:19:26 that -- that awareness became publicly known and
209:19:29 known to you in or around February of 2008?
309:19:35 A. I don't recall the exact date. I do recall
409:19:39 that, you know, it became widely known. It was in
509:19:41 the newspapers.609:19:44 Q. And that's how you learned about it, from
709:19:46 the newspapers?
809:19:48 A. No. I learned about it from my boss, my
909:19:52 manager, about the same time that the newspapers came
1009:19:54 out.
1109:19:55 Q. And in terms of what you called "legal day
1209:19:58 one," was that July 1st, 2008?
1309:20:01 A. Yes.
1409:20:01 Q. And was there a period between February of
1509:20:05 2008 and July 1st, 2008 that Bank of America and
1609:20:11 Countrywide worked together to discuss transition
1709:20:14 plans?
1809:20:17 A. I did have meetings with Bank of America
1909:20:21 associates to -- the areas that I was managing. I
2009:20:25 did meet with them to discuss how they operated. I
2109:20:28 met with their associates that managed those areas
2209:20:30 and we talked about, you know, merging the two teams.
2309:20:33 Q. Right. And then you made plans to
2409:20:35 effectuate that merger?
2509:20:38 A. We -- we did not make any plans really to
Page 885
109:20:42 merge the two departments until after legal day one.
209:20:45 What we just talked about was how we both
309:20:48 operated. We discussed what we thought were best
409:20:51 practices. There were Bank of America and
509:20:56 Countrywide teams that oversaw like operations that609:20:59 were talking about it as well. And so that was going
709:21:02 on. But we didn't actually talk about how we were
809:21:04 going to do it until after legal day one.
909:21:08 Q. Okay. And then after legal day one, you --
1009:21:11 you made and then implemented plans to accomplish the
1109:21:13 merger of the departments. Is that right?
1209:21:16 MR. TANDY: Objection.
1309:21:18 THE WITNESS: After legal day one, we then
1409:21:22 started actively discussing how we were going to do
1509:21:25 it. We took information that we received from the
1609:21:26 operations teams that did overviews as well. We
1709:21:30 started introducing ourselves, talking, and, you
1809:21:33 know, we then started working on a plan to merge the
1909:21:36 operations as far as how we operated.
2009:21:39 It wasn't something that happened overnight.
2109:21:41 I mean, it was a process over months.
2209:21:41 BY MR. CALAMARI:
2309:21:45 Q. Okay. Now, I want to take you back to the
2409:21:47 period before the merger was announced, that is, the
2509:21:53 period prior to February of 2008.
Page 886
109:22:01 In that period, you were -- well, let me --
209:22:17 let me say it differently.
309:22:17 In that period, how were repurchase claims
409:22:22 from investors or insurers processed?
509:22:28 MR. TANDY: Objection.609:22:33 THE WITNESS: So prior to February of 2008?
709:22:36 BY MR. CALAMARI:
809:22:37 Q. Yes.
909:22:39 A. We had started to make some changes in our
1009:22:42 process, starting about October of '07, in our
1109:22:46 repurchase process. And that was due to my manager,
1209:22:49 Rod Williams, announcing that he was going to leave
1309:22:51 the company. And because he was leaving the company,
1409:22:57 we had to start thinking about how we were going to
1509:22:59 handle repurchase claims with that change.
1609:23:02 We had a monthly meeting that we talked
1709:23:04 about repurchase claims and we knew we had to
1809:23:07 reassess the process. So we started working on that.
1909:23:10 But we -- I mean, we continued to process repurchase
2009:23:13 claims through the time that he left in a very
2109:23:18 similar manner. He actually left I believe about
2209:23:20 February of '08.
2309:23:22 Q. So I would like to focus and if -- if -- we
2409:23:29 need to focus on the period pre-October '07 before
2509:23:33 you started to change the plans. I just want to get
-
7/30/2019 MBIA Insurance Corporation v. Countrywide Home Loans Inc., Exhibit 70
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1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
7 (Pages 887 to 890)
Page 887
109:23:36 a general description of how it was done pre-October
209:23:39 '07.
309:23:41 A. Okay. And how in-depth? I mean, just --
409:23:44 you want me just to tell you how we handled the
509:23:47 finalization or --609:23:49 Q. Well, I'll try to be more specific with my
709:23:51 question.
809:23:52 If an investor or a monoline insurer wanted
909:23:58 to pursue a repurchase claim, how would they initiate
1009:24:03 that?
1109:24:03 MR. TANDY: Objection.
1209:24:07 THE WITNESS: Anyone that wanted to initiate
1309:24:09 a claim against Countrywide was required to send that
1409:24:13 claim in to us in writing. It had to be a written
1509:24:17 claim, and one -- and it had to also tell us what
1609:24:21 they were requesting, why they felt it was a breach,
1709:24:26 cite sections of the contract that they felt were
1809:24:28 breached. And once we received that, we would then
1909:24:33 start reviewing it.
2009:24:35 I had senior underwriters that were
2109:24:37 reviewing these loans. And they would assess the
2209:24:40 validity of the claim, make a determination whether
2309:24:44 or not they agreed or that they felt that the claim
2409:24:47 was not something that we should repurchase. And
2509:24:52 then they would go ahead and write an appeal on that.
Page 888
109:24:55 If it was a claim that they felt should be
209:24:58 repurchased, they discussed that with their manager.
309:25:00 If they both agreed, then they prepared what we
409:25:02 called a repurchase authorization. And that
509:25:05 repurchase authorization was put into a meeting that609:25:09 we held once a month and we actually discussed them
709:25:12 in those meetings.
809:25:13 BY MR. CALAMARI:
909:25:14 Q. And just to be clear, what group within
1009:25:22 Countrywide would that -- would that repurchase claim
1109:25:30 be funneled to?
1209:25:33 MR. TANDY: Objection.
1309:25:34 BY MR. CALAMARI:
1409:25:35 Q. What is the name of the group that handled
1509:25:36 the repurchase claims?
1609:25:37 A. During that time period, it was called
1709:25:39 "investor audit."
1809:25:43 Q. And was that the only group that would be
1909:25:45 the initial reviewer of repurchase claims?
2009:25:50 A. Investor audit was the initial repository we
2109:25:53 received the claims. I mean, that wouldn't -- didn't
2209:25:56 mean that we didn't reach out to other parties within
2309:25:58 the company. Our contract review departments, our
2409:26:01 servicing departments, our legal departments. I
2509:26:03 mean, we reached out to other parties. But the
Page 889
109:26:07 initial requests came to the investor audit
209:26:09 department.
309:26:10 Q. Okay. And if the investor audit group
409:26:15 decided to, in your words, appeal the repurchase,
509:26:23 would that decision be implemented without further609:26:28 review within Countrywide?
709:26:29 MR. TANDY: Objection.
809:26:33 THE WITNESS: It -- the underwriters, senior
909:26:36 underwriters had the ability to appeal loans on their
1009:26:39 own. They, you know, had the ability also to talk to
1109:26:43 their managers or senior managers. They, too, could
1209:26:46 get information from outside parties. But every
1309:26:50 appeal that went out did not go through, you know,
1409:26:53 committee review.
1509:26:53 BY MR. CALAMARI:
1609:26:54 Q. And if they decided to recommend repurchase
1709:26:58 of the loan, you said that that would go to a
1809:27:01 committee review?
1909:27:02 A. Just for the final -- it went to a committee
2009:27:05 review for the final sign-off and approval.
2109:27:07 Q. Okay. And what was the name of that
2209:27:09 committee?
2309:27:09 A. It was loss exposure group. It was actually
2409:27:13 a group. It was a working group.
2509:27:16 Q. Loss exposure group?
Page 890
109:27:18 A. Hm-hm. It was LERG, L-E-R-G.
209:27:26 Q. Was that sometimes referred to as LERC,
309:27:28 L-E-R-C?
409:27:29 A. It was originally called LERC, loss exposure
509:27:33 review committee, and then it became LERG because it609:27:35 changed from a committee to a working group.
709:27:38 Q. Do you know when that change took place?
809:27:42 A. I don't remember specifically. I mean, it
909:27:45 was '06-'07 time frame.
1009:27:53 Q. And you were a member of first that
1109:28:01 committee and then that group?
1209:28:02 MR. TANDY: Objection.
1309:28:03 THE WITNESS: I was when -- after I had
1409:28:06 joined the investor audit department.
1509:28:08 BY MR. CALAMARI:
1609:28:08 Q. When did you join the investor audit
1709:28:10 department?
1809:28:10 A. June of 2003.
1909:28:12 Q. Okay. And at that point in time, you became
2009:28:15 a member of that committee, that is, LERC?
2109:28:15 A. Yes.
2209:28:20 Q. And did you remain on the committee at the
2309:28:25 time it changed its name to LERG?
2409:28:27 MR. TANDY: Objection.
2509:28:29 THE WITNESS: I did.
-
7/30/2019 MBIA Insurance Corporation v. Countrywide Home Loans Inc., Exhibit 70
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CONTAINS HIGHLY CONFIDENTIAL INFORMATION
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8 (Pages 891 to 894)
Page 891
109:28:29 BY MR. CALAMARI:
209:28:30 Q. Okay. And you had written procedures that
309:28:52 were used in dealing with the repurchase process?
409:28:57 A. We had written policies and procedures
509:29:01 within the department.609:29:03 Q. And those policies and procedures were
709:29:06 available to the underwriters who were handling the
809:29:10 specific review of the repurchase claims?
909:29:10 A. Yes.
1009:29:20 Q. What kinds of information would you utilize
1109:29:24 to review the repurchase claims aside from the
1209:29:30 information provided by the investor or insurer?
1309:29:33 MR. TANDY: Objection.
1409:29:36 THE WITNESS: Every claim was different, so
1509:29:38 there wasn't a specific set of information that we
1609:29:43 used. We had to review what the claim was and, you
1709:29:47 know, access any necessary information in order to
1809:29:51 analyze that claim.
1909:29:52 So there wasn't anything set. It was based
2009:29:55 solely on what came in and what we needed to review.
2109:29:58 BY MR. CALAMARI:
2209:29:58 Q. Would you look at the contract with the
2309:30:00 investors?
2409:30:01 MR. TANDY: Objection.
2509:30:04 THE WITNESS: At one point in time, we were
Page 892
109:30:06 looking at contracts, but we did get a contract
209:30:10 review department involved to actually review the
309:30:14 contracts. We had legal helping us with the
409:30:18 contracts. We weren't reviewing them on our own, but
509:30:21 I did have copies of the contracts.609:30:23 BY MR. CALAMARI:
709:30:24 Q. You say at one point in time, you had a
809:30:26 contract review department that -- I'm sorry.
909:30:30 You said at one point in time, you began to
1009:30:32 utilize a contract review department. Do you
1109:30:35 remember what that point in time was?
1209:30:40 A. Well, it -- we always used contract review
1309:30:42 employees that had that expertise and the legal
1409:30:45 department and -- from the time that I joined the
1509:30:48 investor audit department. But what we had a more
1609:30:52 formalized contract review department and that really
1709:30:58 came into play later on. I -- I don't know
1809:31:04 specifically the date, but -- when we started calling
1909:31:07 them specifically contract review, but we always used
2009:31:11 outside contract -- people that were knowledgeable in
2109:31:13 the contracts to help us.
2209:31:14 Q. And when you say you don't recall the date,
2309:31:16 can you give me the approximate time frame?
2409:31:22 A. I -- you know, I can't. I can't tell you.
2509:31:23 Q. Was it before the -- was it before the
Page 893
109:31:28 announcement of the Bank of America transaction?
209:31:31 MR. TANDY: Objection.
309:31:33 THE WITNESS: I don't recall.
409:31:34 BY MR. CALAMARI:
509:31:38 Q. Did you also review the Countrywide609:31:40 technical manual?
709:31:42 MR. TANDY: Objection.
809:31:46 THE WITNESS: I mean, we had access to the
909:31:47 Countrywide technical manual. But really when you're
1009:31:53 dealing with repurchases, you're dealing more with --
1109:31:57 I mean, that's kind of like processing. And you're
1209:31:59 not really dealing with processing per se, dealing
1309:32:02 with repurchases.
1409:32:04 BY MR. CALAMARI:
1509:32:05 Q. And did you review the applicable guidelines
1609:32:07 for a particular investment?
1709:32:10 MR. TANDY: Objection.
1809:32:13 THE WITNESS: We had access to the loan
1909:32:14 program guidelines. We would review guidelines in
2009:32:16 conjunction with the contracts and all the other
2109:32:20 facts that were necessary.
2209:32:21 BY MR. CALAMARI:
2309:32:22 Q. And did you also have access to quality
2409:32:25 control audits?
2509:32:29 A. Investor audit did not have access to the
Page 894
109:32:31 quality control audits.
209:32:35 Q. So one of the things you would -- so would
309:32:39 you look -- strike that.
409:32:39 Would you look at the results of an
509:32:43 investor -- of a -- I'm sorry.609:32:44 Would you look at the results of a quality
709:32:46 control audit of a loan that happened to be in the
809:32:52 securitization that you were examining for a
909:32:56 repurchase claim?
1009:32:57 MR. TANDY: Objection.
1109:32:59 THE WITNESS: Quality control had an
1209:33:00 internal process that wasn't -- they didn't know who
1309:33:02 the loans were going to be sold to. So our QC
1409:33:06 process was not in any way related to the
1509:33:08 repurchases. So the investor audit department didn't
1609:33:10 review quality control audits. They weren't -- you
1709:33:13 couldn't correlate them. The QC audits was a process
1809:33:17 that we developed internally, whereas investor audit
1909:33:20 was not.
2009:33:22 Very early on, back before we started
2109:33:26 looking at contracts and when we sold most of our
2209:33:29 loans to Fannie Mae, we did look at QC audits. But
2309:33:32 after we started selling loans to other parties, we
2409:33:35 already had different contracts and we had no idea
2509:33:37 who we were selling to, we stopped looking at the
-
7/30/2019 MBIA Insurance Corporation v. Countrywide Home Loans Inc., Exhibit 70
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CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
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9 (Pages 895 to 898)
Page 895
109:33:39 audits at all.
209:33:39 BY MR. CALAMARI:
309:33:40 Q. So even if the repurchase claim related to a
409:33:48 loan that had been the subject of a quality control
509:33:52 audit, you would not look at that quality control609:33:57 audit to assist you in analyzing the repurchase
709:33:59 claim?
809:33:59 MR. TANDY: Objection.
909:34:02 THE WITNESS: I did not see it as being an
1009:34:04 assistance in any way in looking at the claim because
1109:34:07 they were two different ways of reviewing loans with
1209:34:09 different processes.
1309:34:10 BY MR. CALAMARI:
1409:34:10 Q. And are you saying you did not access the
1509:34:13 results of quality control audits in terms of
1609:34:18 reviewing repurchase claims?
1709:34:19 MR. TANDY: Objection.
1809:34:20 THE WITNESS: No, I did not.
1909:34:22 BY MR. CALAMARI:
2009:34:22 Q. And your -- is it -- are you also saying
2109:34:24 that your underwriters did not access quality control
2209:34:29 audits in determining repurchase claims?
2309:34:32 MR. TANDY: Objection.
2409:34:33 THE WITNESS: It was not part of our
2509:34:34 process, except as I indicated earlier on, and I
Page 896
109:34:38 can't tell you the exact date we stopped doing it.
209:34:41 But when we were selling most of our loans to Fannie
309:34:44 Mae and Freddie Mac, we did look at them. And that
409:34:46 was like '03-'04 time frames, I believe.
509:34:48 BY MR. CALAMARI:609:34:49 Q. And when do you think you stopped doing
709:34:51 that?
809:34:52 A. I -- I can't tell you a specific date. I
909:34:54 just know that we made the change on it because every
1009:34:58 loan was sold uniquely under different contracts.
1109:35:01 And our QC process was not looking at who we sold the
1209:35:04 loan to, what the contract was. It didn't take that
1309:35:07 into consideration. So it was like comparing apples
1409:35:11 to oranges. It wasn't relevant.
1509:35:12 Q. So you're saying that a loan that could be
1609:35:14 rated, for example, severely unsatisfactory, let's
1709:35:17 say because it was missing the mortgage note, would
1809:35:23 not be considered severely unsatisfactory in
1909:35:27 connection with a purchase by an investor?
2009:35:29 MR. TANDY: Objection.
2109:35:32 THE WITNESS: Well, I'm say- -- I can't
2209:35:34 really address that and answer that because, you
2309:35:36 know, this is kind of a hypothetical. I -- I'm
2409:35:39 not -- I can't answer that.
2509:36:19 MS. BEA: This has been previously marked so
Page 897
109:36:20 we don't need to re-mark it.
209:38:40 MR. CALAMARI: Okay.
309:38:45 BY MR. CALAMARI:
409:38:59 Q. Quality control had a -- quality control had
509:39:10 a severely unsatisfactory rating. Is that correct?609:39:15 MR. TANDY: Objection.
709:39:16 THE WITNESS: Yes.
809:39:17 BY MR. CALAMARI:
909:39:17 Q. And they applied that loans [sic] to loans
1009:39:23 that for whatever reason quality control felt were
1109:39:28 not underwritten correctly. Is that correct?
1209:39:31 MR. TANDY: Objection.
1309:39:34 THE WITNESS: No. We had a definition for
1409:39:36 severe unsat. There was a ratings grid that we used
1509:39:41 that outlined sort of the thought process that we
1609:39:45 went through. And we did an assessment of that loan
1709:39:50 and, you know, made a determination based upon, you
1809:39:54 know, all the facts when we reviewed it .
1909:39:55 BY MR. CALAMARI:
2009:39:55 Q. Okay. And that process continued right up
2109:40:02 through the period of the Bank of America
2209:40:08 transaction?
2309:40:08 A. Yes.
2409:40:10 Q. So even though you were -- you were still
2509:40:14 selling -- you were now selling loans in great
Page 898
109:40:17 numbers to investors, the quality control process
209:40:20 continued?
309:40:22 MR. TANDY: Objection.
409:40:24 MR. CALAMARI: You're right. That's a bad
509:40:25 question. I'll withdraw it.609:40:25 BY MR. CALAMARI:
709:40:27 Q. Is it fair to say that the QC process of
809:40:31 examining loans continued through February of 2008?
909:40:40 A. Countrywide had a quality control process
1009:40:44 that was in existence and we continued to review
1109:40:47 loans that were originated, you know, in accordance
1209:40:49 with the QC guidelines, you know, up through
1309:40:53 February, yes.
1409:40:55 Q. Yes. And when you say you continued to
1509:40:57 review loans through February of 2008, that included
1609:41:05 loans that were sold to investors as opposed to
1709:41:09 government services?
1809:41:12 A. Yes. Our QC process was developed using the
1909:41:16 most restrictive guidelines. So because we used the
2009:41:20 most restrictive guidelines and loans that were sold
2109:41:22 to whole loan investors or into securities had much
2209:41:28 broader reps and warrants than the most restrictive,
2309:41:29 we were looking -- since we were being the most
2409:41:31 restrictive, we were looking at loans much harder
2509:41:34 than they would be by the investors.
-
7/30/2019 MBIA Insurance Corporation v. Countrywide Home Loans Inc., Exhibit 70
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CYNTHIA SIMANTEL - 8/24/2012
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10 (Pages 899 to 902)
Page 899
109:41:35 Q. Okay. And you were -- and those guidelines
209:41:42 were written guidelines, were they not?
309:41:44 MR. TANDY: Objection.
409:41:47 THE WITNESS: The QC policies and procedures
509:41:49 were written.609:41:49 BY MR. CALAMARI:
709:41:51 Q. Correct.
809:41:51 A. The guidelines we used were really the GSE
909:41:56 reps and warrants guidelines.
1009:41:58 Q. Is that specified in the Q -- in the QC
1109:42:00 procedures?
1209:42:01 MR. TANDY: Objection.
1309:42:07 THE WITNESS: I don't know exactly how it's
1409:42:09 specified. I think it is that we talk about using
1509:42:11 the more restrictive guidelines of the GSEs.
1609:42:11 BY MR. CALAMARI:
1709:42:14 Q. Where did you talk about that?
1809:42:16 A. You know, I -- those documents I have not
1909:42:22 looked at in a very long time. I know that our
2009:42:25 process internally and we discussed in all of our
2109:42:28 meetings and everything that that's how we did it ,
2209:42:30 and that's how we initiated our reviews. I mean, I
2309:42:33 was part of the department. I just can't tell you
2409:42:35 exactly where it's written down.
2509:42:37 Q. Is there -- was it written down at all?
Page 900
109:42:40 A. I --
209:42:41 MR. TANDY: Objection.
309:42:41 THE WITNESS: I can't tell you.
409:42:43 BY MR. CALAMARI:
509:42:43 Q. QC department went through internal audit609:42:45 reviews. Is that correct?
709:42:45 A. Yes.
809:42:48 Q. Did internal audit ever indicate that that
909:42:51 was a measurement by which the QC department either
1009:42:57 was or should have been employed?
1109:43:01 MR. TANDY: Objection.
1209:43:04 THE WITNESS: No.
1309:43:05 BY MR. CALAMARI:
1409:43:06 Q. Did you respond to internal audit --
1509:43:08 MR. TANDY: Objection.
1609:43:09 BY MR. CALAMARI:
1709:43:10 Q. -- from time to time?
1809:43:12 A. If internal audit came in and they had any
1909:43:15 questions, then absolutely.
2009:43:18 Q. And did you in any of those responses say,
2109:43:19 the reason we have high levels of severely
2209:43:23 unsatisfactory loans is that we're measuring to a
2309:43:27 government standard but we're not marketing to a
2409:43:29 government standard?
2509:43:29 MR. TANDY: Objection.
Page 901
109:43:33 THE WITNESS: I -- I actually don't recall209:43:35 high levels of severe unsats. But I don't recall309:43:38 ever making a statement even similar to that.409:43:41 BY MR. CALAMARI:
509:43:41 Q. Okay. Is it also fair to say that there was609:43:52 a high level of correlation between loans that were709:44:00 repurchased -- I'm sorry. Let me strike that.809:44:03 From time to time, investors would put back909:44:06 loans that had been designated severely1009:44:08 unsatisfactory. Is that correct?1109:44:10 MR. TANDY: Objection.1209:44:12 THE WITNESS: I -- I wouldn't be able to1309:44:14 answer that. I --1409:44:16 BY MR. CALAMARI:1509:44:16 Q. You don't know if a loan that was rated1609:44:18 severely unsatisfactory was ever put back?1709:44:22 MR. TANDY: Objection.1809:44:24 THE WITNESS: I -- you know, I don't know1909:44:26 without looking at data. I mean, I -- I wouldn't be2009:44:29 able to say definitively.2109:44:31 BY MR. CALAMARI:2209:44:31 Q. Okay. So if your -- if you have documents2309:44:36 which refer to the fact that a putback request was a2409:44:39 putback of the severely unsatisfactory loan, that2509:44:44 that doesn't ring a bell to you? You just don't
Page 902
109:44:46 recall that ever happening?209:44:47 MR. TANDY: Objection.309:44:51 THE WITNESS: I -- I don't recall that.409:44:52 BY MR. CALAMARI:
509:44:55 Q. Would you have expected that if severely609:45:00 unsatisfactory loans were put back, that they would709:45:02 have been repurchased?809:45:03 MR. TANDY: Objection.909:45:06 THE WITNESS: I mean, that's a hypothetical1009:45:07 question, so it's very difficult for me to answer.1109:45:10 But I would say no, I wouldn't expect it.1209:45:13 BY MR. CALAMARI:1309:45:28 Q. Did Countrywide expect that that would1409:45:29 happen?1509:45:30 MR. TANDY: Objection.1609:45:32 THE WITNESS: I mean, I can't answer for1709:45:33 Countrywide.1809:45:35 BY MR. CALAMARI:1909:45:56 Q. Now, you said that some changes were made2009:46:05 between October '07 -- or let's strike that.2109:46:13 You said that changes in how things would be2209:46:16 done started to be made in October of '07.2309:46:22 MR. TANDY: Objection.2409:46:23 BY MR. CALAMARI:2509:46:23 Q. Is that correct?
-
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11 (Pages 903 to 906)
Page 903
109:46:24 A. No. We started to discuss changes because
209:46:27 Rod Williams was going to leave and Rod was the
309:46:31 chairman of the loss exposure review group. And with
409:46:34 his departure, you know, we needed to talk about how
509:46:37 we were going to handle repurchase approvals going609:46:39 forward.
709:46:40 Q. Okay. And what did you discuss about how
809:46:46 you would handle the purchases -- repurchases going
909:46:48 forward?
1009:46:51 A. Well, we talked about the process that we
1109:46:53 wanted to use. Because Rod was the chair, there were
1209:46:58 other members on the committee that were what we
1309:47:03 called voting members. So, I mean, the decision, the
1409:47:04 interim decision was made that, after Rod left, I
1509:47:07 would take over as the chair making the final
1609:47:11 sign-off and that the other members would continue to
1709:47:13 be part of the meetings that we held.
1809:47:17 Q. Okay. And were there any other changes you
1909:47:19 discussed?
2009:47:23 A. Not during that time frame, no.
2109:47:24 Q. Did there come a later time frame when you
2209:47:26 discussed additional changes?
2309:47:32 A. We started -- I mean, after Rod left, I
2409:47:33 mean, a lot of discussions were going on because, you
2509:47:35 know, we had to figure out the processes.
Page 904
109:47:37 Also, you know, volumes in repurchases were
209:47:40 increasing and so we had to talk about that as well,
309:47:43 because you couldn't do things necessarily the same
409:47:47 way that we had in the past.
509:47:48 So there started to be ongoing discussions609:47:51 about a process. It was an evolution that took
709:47:54 place.
809:47:58 Q. Were any changes implemented in the period
909:48:00 of -- other than the one you mentioned, the Rod
1009:48:02 leaving and you taking over, were any changes
1109:48:04 implemented between October of 2007 and February of
1209:48:13 2008?
1309:48:15 MR. TANDY: Objection.
1409:48:22 THE WITNESS: Not that I recall.
1509:48:24 BY MR. CALAMARI:
1609:48:24 Q. Okay. And in February of 2008 as we
1709:48:28 discussed before, the merger with Bank of America was
1809:48:31 announced and you began to participate in discussions
1909:48:36 with Bank of America people. Is that fair to say?
2009:48:39 A. Not in February, I don't believe. I think
2109:48:42 it was later. But I did start having meetings with
2209:48:45 them, yes.
2309:48:45 Q. And were any changes to the processes and
2409:48:50 procedures implemented during the period that you
2509:48:53 were having meetings with them?
Page 905
109:48:55 MR. TANDY: Objection.
209:48:57 THE WITNESS: No. I mean, I continued to
309:48:59 handle the approvals of the repurchases.
409:49:01 BY MR. CALAMARI:
509:49:01 Q. And did you talk with people at Bank of609:49:03 America about proposed changes to the process and
709:49:06 procedures?
809:49:08 A. No.
909:49:08 Q. Was there a transition committee set up to
1009:49:25 deal with the plan for transition of the two
1109:49:31 businesses?
1209:49:33 MR. TANDY: Objection.
1309:49:34 THE WITNESS: Well, I mean, I know that
1409:49:35 there were transition teams, but I was not part of
1509:49:39 those. I have no idea --
1609:49:40 BY MR. CALAMARI:
1709:49:41 Q. Okay.
1809:49:41 A. -- how they operated.
1909:49:43 Q. Did you report to someone that was a member
2009:49:44 of the transition team?
2109:49:48 A. No.
2209:49:48 Q. Do you know which transition team was
2309:49:49 responsible for the integration of quality control?
2409:49:53 MR. TANDY: Objection.
2509:49:54 THE WITNESS: No.
Page 906
109:49:55 BY MR. CALAMARI:
209:49:55 Q. Do you know which transition was responsible
309:49:57 for the integration of investor audit group?
409:50:02 MR. TANDY: Objection.
509:50:02 THE WITNESS: No.609:50:03 BY MR. CALAMARI:
709:50:04 Q. When do you recall any further changes being
809:50:07 implemented to the processes by which the investor
909:50:14 audit group processed repurchase agreements --
1009:50:18 repurchase claims? I'm sorry.
1109:50:24 A. There was a change as far as the management
1209:50:27 of the investor audit department. So once that
1309:50:30 change was being discussed, which was latter part of
1409:50:34 '08, you know, we started talking about how that
1509:50:36 might impact, you know, with the new manager. It was
1609:50:41 a legacy Countrywide manager that was coming over.
1709:50:44 But really what it was is more not a change
1809:50:49 in how we were going to handle repurchases, but we
1909:50:51 were looking at how we could facilitate them, you
2009:50:54 know, given the increase in volume. The process
2109:50:58 per se as far as how we reviewed them and handled
2209:51:01 them didn't really change through any of this.
2309:51:04 Q. So the investment auditor group remained in
2409:51:10 place throughout 2008?
2509:51:10 A. Yes.
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12 (Pages 907 to 910)
Page 907
109:51:14 Q. And LERC or LERG, depending on which
209:51:18 initials are used, remained in place throughout 2008?
309:51:21 MR. TANDY: Objection.
409:51:23 THE WITNESS: It -- the process remained in
509:51:26 place.609:51:27 What happened is, instead of having a
709:51:29 monthly meeting in Calabasas with Rod, I had a
809:51:34 meeting with the voting members in my office and we
909:51:38 went through loans.
1009:51:40 BY MR. CALAMARI:
1109:51:41 Q. Where was your office?
1209:51:43 A. It was in Westlake Village. And I held the
1309:51:45 meetings weekly instead of monthly.
1409:51:48 Q. And were records kept of those meetings?
1509:51:52 A. No, because it was a working group. Our
1609:51:55 records were the decisions that we made on the loans,
1709:51:57 our author- -- LERC -- what we called LERC
1809:51:59 authorizations.
1909:52:00 Q. Okay. Were there any other members of LERC
2009:52:06 or LERG during 2008?
2109:52:08 MR. TANDY: Objection.
2209:52:15 THE WITNESS: It wasn't -- it wasn't a
2309:52:18 committee, so, I mean, there weren't really members
2409:52:20 because it's not a committee. But the voting parties
2509:52:24 were still the same that they had been.
Page 908
109:52:28 BY MR. CALAMARI:
209:52:29 Q. So informally they continued to operate in
309:52:31 the same way that they operated previously formally?
409:52:35 MR. TANDY: Objection.
509:52:36 THE WITNESS: We did continue to have609:52:38 meetings and review loans just as we had in the past.
709:52:41 It just wasn't, you know, the same kind of meeting
809:52:44 that it had been. It was more -- done more often.
909:52:49 BY MR. CALAMARI:
1009:52:49 Q. And you mentioned a change in management in
1109:52:52 this period. Can you tell me what that change was?
1209:53:00 A. There -- quality control and investor audit
1309:53:02 reported to the same manager. There was a decision
1409:53:06 to -- made to separate the two. And one -- quality
1509:53:11 control stayed with the manager, and the investor
1609:53:13 audit repurchase department went to a new manager.
1709:53:15 Q. And that was in 2008?
1809:53:17 A. No. The discussions started -- I don't
1909:53:20 believe it actually happened until early '09.
2009:53:25 Q. And who was the manager that they reported
2109:53:27 to when it was -- when they reported to the same
2209:53:31 manager?
2309:53:31 MR. TANDY: Objection.
2409:53:32 THE WITNESS: Hans Rusli.
2509:53:32 BY MR. CALAMARI:
Page 909
109:53:36 Q. And what was his title?
209:53:39 A. Let's see. Well, at Countrywide, he was an
309:53:45 executive vice president on credit risk management.
409:53:52 And then Bank of America, I know the title was SVP,
509:53:55 but I can't tell you exactly what the rest of it was.609:53:59 Q. Same person but different title?
709:54:00 A. Right.
809:54:01 Q. Who did he report to?
909:54:06 A. Mark Miller.
1009:54:07 Q. And what was Mark Miller's role?
1109:54:11 A. He was a credit risk manager.
1209:54:20 Q. What's his background?
1309:54:27 A. I mean -- I mean, he was legacy Countrywide,
1409:54:30 had been there a very, very long time in
1509:54:33 credit-related fields, but I cannot tell you his
1609:54:35 background.
1709:54:36 Q. Now, after -- and you said there came a time
1809:55:14 when the investment audit group and the quality
1909:55:19 control group split?
2009:55:22 A. From underneath the same manager, yes.
2109:55:24 Q. Right. Who was the manager that the quality
2209:55:26 control group reported to?
2309:55:27 A. The -- after the split? Or --
2409:55:31 Q. Yes, after the split.
2509:55:32 A. That was Hans Rusli.
Page 910
109:55:33 Q. Okay. And who was the manager that the209:55:37 investment audit group reported to?309:55:38 A. Mike Schloessmann.409:55:39 Q. Okay. And Mr. Schloessmann, who did he
509:55:42 report to?609:55:43 A. Oh, wow. You know, I'm sorry, I just --709:55:56 there's been a lot of changes.809:55:58 Q. Did -- did they ultimately -- was there some909:56:02 greater department that you were ultimately all part1009:56:05 of, whether it was investment audit or quality1109:56:08 control?1209:56:09 MR. TANDY: Objection.1309:56:15 THE WITNESS: We didn't -- I know they1409:56:16 didn't report up through the same management1509:56:18 structure.1609:56:18 BY MR. CALAMARI:1709:56:19 Q. That's pretty much what I'm asking.1809:56:20 A. Yeah. No.1909:56:21 Q. I'm trying to find out where those2009:56:22 management structures led.2109:56:24 A. I mean, Hans Rusli reported up through a2209:56:27 different mana- -- senior manager up to Barbara2309:56:30 Desoer at the bank once that happened --2409:56:32 Q. Okay.2509:56:32 A. -- once the merger happened. And --
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13 (Pages 911 to 914)
Page 911
109:56:34 Q. And was that --209:56:34 A. -- Mike Schloessmann reported up to another309:56:37 manager -- oh, gosh, I can't recall. 'Cause there409:56:39 was an interim period before Terry Laughlin came,
509:56:43 but -- and she -- and then he reported, but it was609:56:44 separate reporting lines.709:56:45 Q. Okay. And in terms of those separate809:56:50 reporting lines, did they have separate descriptors909:56:51 as to their group? Was one credit risk and another1009:56:55 one something else, or you don't know?1109:56:57 MR. TANDY: Objection.1209:56:58 THE WITNESS: Yeah, you know, this was a1309:56:59 time of a lot of changes as far as, you know,1409:57:02 figuring out how -- you know, with the -- with the1509:57:06 transition. So, I mean, I -- I cannot tell you.1609:57:09 BY MR. CALAMARI:1709:57:19 Q. After the legal day one, what you referred1809:57:21 to as legal day one, were your repurchase groups --1909:57:31 was the investment audit group combined with a2009:57:34 similar group from legacy Bank of America?2109:57:38 MR. TANDY: Objection.2209:57:41 THE WITNESS: After legal day one, we then2309:57:43 started to transition the two departments in2409:57:48 together.2509:57:48 Again, this was a time where there was, you
Page 912
109:57:51 know, a lot of changes going on. At that point, at
209:57:57 legal day one, I initially did not take on the
309:57:59 repurchase department. I stayed in QC. Another
409:58:03 manager took on the repurchase department. And so,
509:58:08 you know, I wasn't really a party of it until later.609:58:11 So I don't know how much they did prior to me coming
709:58:13 back into the repurchase department.
809:58:13 BY MR. CALAMARI:
909:58:15 Q. But throughout that period, you remained
1009:58:17 the -- the LERC person?
1109:58:19 MR. TANDY: Objection.
1209:58:21 THE WITNESS: Yeah. I was still involved in
1309:58:22 that department as well, and we were transitioning.
1409:58:25 And, yes, I remained the person that could do the
1509:58:28 approvals.
1609:58:28 BY MR. CALAMARI:
1709:58:29 Q. Okay. And was the new combined department
1809:58:35 given a new name?
1909:58:40 MR. TANDY: Objection.
2009:58:43 THE WITNESS: Not initially. I mean, it
2109:58:45 was -- you know, investor audit and the BAC
2209:58:50 repurchase department was the BAC repurchase
2309:58:54 department.
2409:58:54 BY MR. CALAMARI:
2509:58:54 Q. Okay. And eventually when those two
Page 913
109:58:56 entities were fully combined, did they have a new
209:58:59 name or did they just stay the investor audit
309:59:02 department?
409:59:03 MR. TANDY: Objection.
509:59:05 THE WITNESS: They are now called -- they're609:59:07 call investor audit.
709:59:08 BY MR. CALAMARI:
809:59:08 Q. Still today?
909:59:09 A. They were called -- they're now called
1009:59:13 claims management.
1109:59:15 Q. Okay. When did they start -- become claims
1209:59:18 management?
1309:59:19 A. Gosh. That's a -- that's fairly recent.
1409:59:23 Probably 2010, 2011.
1509:59:27 Q. And although I hate to jump ahead in time
1609:59:38 for one question, I can't resist.
1709:59:41 Is there a reason why it became -- why the
1809:59:49 name was changed to claims management?
1909:59:52 MR. TANDY: Objection.
2009:59:53 THE WITNESS: It was just felt to be more
2109:59:55 descriptive of what we were doing than investor audit
2209:59:59 people. When you say "investor audit," no one knew
2310:00:02 what you were talking about.
2410:00:03 BY MR. CALAMARI:
2510:00:03 Q. Okay. Back into the time frame we've been
Page 914
110:00:07 talking about. The combined department was located
210:00:15 in Westlake Village?
310:00:17 A. Yes.
410:00:17 MR. ALLAN: Objection.
510:00:18 MR. TANDY: Objection.610:00:21 MR. CALAMARI: I better rephrase the
710:00:22 question because I just don't know if I made a
810:00:25 mistake.
910:00:25 BY MR. CALAMARI:
1010:00:26 Q. Where was the combined department located?
1110:00:27 MR. TANDY: Objection.
1210:00:31 THE WITNESS: Quality control and investor
1310:00:31 audit were -- for legacy Countrywide were in Westlake
1410:00:38 Village. The quality control departments for Bank of
1510:00:41 America were not located in that facility.
1610:00:44 BY MR. CALAMARI:
1710:00:44 Q. Once the entities were combined, where was
1810:00:46 the location of the department?
1910:00:48 MR. TANDY: Objection.
2010:00:51 THE WITNESS: We had various different
2110:00:53 locations. We -- we had the Westlake. We had
2210:00:56 Arizona. We had Brea. We had some in Pasadena.
2310:01:02 BY MR. CALAMARI:
2410:01:03 Q. So there was no one location that
2510:01:05 constituted the -- the -- if you will, the location
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14 (Pages 915 to 918)
Page 915
110:01:10 of the investor audit group?
210:01:13 MR. TANDY: Objection.
310:01:15 THE WITNESS: I mean, we had associates in
410:01:18 different buildings. It --
510:01:20 BY MR. CALAMARI:610:01:22 Q. Where were most of the people located?
710:01:24 MR. TANDY: Objection.
810:01:26 THE WITNESS: The legacy Countrywide
910:01:27 associates were predominantly in Westlake Village.
1010:01:31 BY MR. CALAMARI:
1110:01:32 Q. And where were the legacy Bank of America
1210:01:33 people located?
1310:01:36 A. The legacy repurchase department was located
1410:01:38 predominantly in Brea. And the legacy quality
1510:01:42 control was in Arizona.
1610:01:44 Q. Okay. And is that true today?
1710:01:55 A. No. Let me think here. I mean, we have
1810:02:00 more locations than we had then. I mean, it's --
1910:02:03 we've grown and we have other locations. We've got
2010:02:06 four -- there's other locations that have been added.
2110:02:10 Q. And was the Arizona location a former
2210:02:14 Countrywide location?
2310:02:16 A. It was both.
2410:02:17 Q. And do you have any recollection of, at the
2510:02:26 time the entities were combined, how many people were
Page 916
110:02:28 employed in the -- the combined investor audit
210:02:32 department?
310:02:33 MR. TANDY: Objection.
410:02:36 THE WITNESS: I -- I do not.
510:02:37 BY MR. CALAMARI:610:02:40 Q. But it is clear that the combined department
710:02:43 included employees from both former Countrywide and
810:02:46 former Bank of America?
910:02:48 MR. TANDY: Objection.
1010:02:52 THE WITNESS: There were associates that had
1110:02:54 been formerly employed by both of those legacy
1210:02:57 entities.
1310:02:58 BY MR. CALAMARI:
1410:03:02 Q. Now, what was your role when you resumed
1510:03:04 working in the repurchase department?
1610:03:09 A. I really went back into my former role of
1710:03:13 investor audit, just handling repurchases from all
1810:03:18 the different entities.
1910:03:21 Q. And did you have a title?
2010:03:27 A. I did. It was SVP audit director.
2110:03:31 Q. And do you recall when that was? That is,
2210:03:44 when you rejoined the investor audit department?
2310:03:48 MR. TANDY: Objection.
2410:03:50 THE WITNESS: Well, I never fully left
2510:03:52 because we were through transition. So, I mean, I
Page 917
110:03:55 was very involved in both departments.
210:04:00 I -- I think it was like November, December
310:04:02 where, you know, it was sort of decided there was
410:04:05 going to be the formal split and I was going to go to
510:04:08 one group. But through the tran- -- I continued, you610:04:13 know, working with QC. I mean, I still sit in QC
710:04:17 meetings today. It's --
810:04:17 BY MR. CALAMARI:
910:04:19 Q. Okay. And that LERC committee continued to
1010:04:24 decide on the ultimate decision as to whether a
1110:04:33 re- -- a repurchase should be approved?
1210:04:39 MR. TANDY: Objection.
1310:04:39 THE WITNESS: It wasn't a committee. But
1410:04:41 these same parties, myself included, continued to
1510:04:44 review repurchases throughout that entire period of
1610:04:47 time.
1710:04:47 BY MR. CALAMARI:
1810:04:48 Q. But you didn't keep formal records of the
1910:04:50 meetings?
2010:04:51 MR. TANDY: Objection.
2110:04:54 THE WITNESS: No. They weren't a committee.
2210:04:55 They were a working group.
2310:04:56 BY MR. CALAMARI:
2410:04:57 Q. How was the -- the -- if you will, the
2510:05:00 decision to repurchase a loan recorded internally for
Page 918
110:05:07 recordkeeping purposes?
210:05:09 MR. TANDY: Objection.
310:05:11 THE WITNESS: We had a database. It was
410:05:14 called PAT. We recorded our approvals in PAT. Also,
510:05:19 at that time, I had LERC authorization that I signed610:05:25 that went over to the wire department.
710:05:25 BY MR. CALAMARI:
810:05:28 Q. And when you say you recorded your decisions
910:05:31 in PAT, did you literally do that from the room that
1010:05:34 you were sitting in meeting? Or was there somebody
1110:05:37 who was responsible for entering the information into
1210:05:40 PAT?
1310:05:41 MR. TANDY: Objection.
1410:05:43 THE WITNESS: It could be either way. We
1510:05:46 could do them during the meeting, just sit there and
1610:05:48 do them on our computers, or we could go after the
1710:05:54 meeting and put them in. There was only certain
1810:05:56 people that could, you know, enter data. But we
1910:05:59 could do it either way.
2010:06:00 BY MR. CALAMARI:
2110:06:01 Q. And those entries would still be in PAT
2210:06:04 today, I presume?
2310:06:06 MR. TANDY: Objection.
2410:06:07 THE WITNESS: Yes.
2510:06:07 BY MR. CALAMARI:
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15 (Pages 919 to 922)
Page 919
110:06:09 Q. And if the decision was not to repurchase
210:06:13 but rather to appeal the claim, how would that be
310:06:20 reflected in the records?
410:06:22 A. If we discussed a loan during a meeting and
510:06:26 we determined that we didn't agree with the610:06:28 repurchase recommendation, we would send the loan
710:06:34 back out to the underwriter and indicate in our
810:06:37 comments that we didn't agree with the repurchase and
910:06:40 give them guidance.
1010:06:43 Q. What was the repurchase oversight group?
1110:07:07 A. That was another group, you know, through
1210:07:08 this transition that came into play that was going to
1310:07:16 not make decisions on loans individually but would
1410:07:19 oversee the process, get reporting on what was being
1510:07:24 approved or, you know, in like data. So it was a
1610:07:30 group to oversee the repurchase process.
1710:07:32 Q. Let me just go back one question. You
1810:07:36 mentioned that you would "indicate in our comments we
1910:07:42 didn't agree with the repurchase and give them
2010:07:44 guidance."
2110:07:45 How would you give them guidance?
2210:07:49 MR. TANDY: Objection.
2310:07:50 THE WITNESS: We would explain to them why
2410:07:52 we didn't agree with their recommendation.
2510:07:57 BY MR. CALAMARI:
Page 920
110:07:59 Q. Would -- would the information as to why you
210:08:01 didn't agree with their recommendation be recorded in
310:08:08 PAT?
410:08:09 MR. TANDY: Objection.
510:08:12 THE WITNESS: It could be. It may have been610:08:15 done via an email notification and then it would be
710:08:20 in the appeal letter that was sent out.
810:08:20 BY MR. CALAMARI:
910:08:22 Q. Okay. Were there differences in the -- in
1010:08:23 the information that was recorded in PAT about your
1110:08:26 reasons for disagreement than the information that
1210:08:28 you would send out to the claimant?
1310:08:33 MR. TANDY: Objection.
1410:08:35 THE WITNESS: No. I mean, if we disagree
1510:08:38 with one, I mean, that would be the basis for our
1610:08:40 appeal.
1710:08:41 BY MR. CALAMARI:
1810:08:44 Q. Well, what I'm asking is whether there would
1910:08:46 be internal reasons for the decision that could be
2010:08:53 different from the reasons that were communicated to
2110:08:58 the claimant?
2210:09:00 MR. TANDY: Objection.
2310:09:03 THE WITNESS: I guess I'm a little confused
2410:09:06 on the question. I mean, you know, you have internal
2510:09:08 processes that you wouldn't give to a claimant. But
Page 921
110:09:11 the reason why we think a loan needs to be appealed,
210:09:15 I -- we put that in our appeal. I mean --
310:09:19 BY MR. CALAMARI:
410:09:19 Q. Was there information that you gathered
510:09:22 about the appeal -- I'm sorry.610:09:25 Was there information that you gathered
710:09:27 about the -- the loan that was the subject of the
810:09:33 repurchase claim that you would not communicate to
910:09:39 the claimant?
1010:09:42 MR. TANDY: Objection.
1110:09:44 THE WITNESS: I mean, that's pretty broadly
1210:09:45 hypothetical. I mean, I -- I'm not sure what you're
1310:09:49 asking me. I -- I just really don't know.
1410:09:55 BY MR. CALAMARI:
1510:10:02 Q. Would you say that you provided the claimant
1610:10:09 all of the reasons and supporting information that
1710:10:14 you gathered that supported your decision to appeal
1810:10:20 the claim?
1910:10:21 MR. TANDY: Objection.
2010:10:23 THE WITNESS: I mean, if -- if the
2110:10:26 informa- -- we didn't always share everything that we
2210:10:28 got as far as like confidential information. I mean,
2310:10:31 if you had something confidential, there was
2410:10:33 discussions on credit reports and things like that
2510:10:35 where people didn't want to share those, we would
Page 922
110:10:38 reference that document that we obtained information
210:10:41 from a credit report.
310:10:43 So, you know, if it was confidential
410:10:44 documentation that we had, you know, we wouldn't
510:10:46 share something like that. But if we were appealing610:10:51 a loan and we had a reason for an appeal, we're going
710:10:53 to tell the requester why we don't agree with them.
810:10:53 BY MR. CALAMARI:
910:10:56 Q. And if there was information you gathered
1010:10:59 that might support the investor's position, even
1110:11:04 though you were going to appeal the loan, would you
1210:11:09 also communicate that information?
1310:11:11 MR. TANDY: Objection.
1410:11:15 THE WITNESS: I -- I don't think -- I mean,
1510:11:18 I guess I'm -- it's so hypothetical, but I don't
1610:11:21 recall an instance like that.
1710:11:23 BY MR. CALAMARI:
1810:11:27 Q. In other words, you don't recall ever
1910:11:28 gathering information that -- all right. Let me
2010:11:38 strike it.
2110:11:39 You don't recall ever -- ever gathering
2210:11:43 information that was both positive and negative in
2310:11:47 connection with the appeal -- strike it again. Let
2410:11:52 me try to rephrase this so that it can be understood
2510:11:55 by anybody.
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CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
16 (Pages 923 to 926)
Page 923
110:11:56 Do you recall, in handling a repurchase210:12:02 claim, you would do an investigation of the issues310:12:06 set forth in the claim?410:12:07 MR. TANDY: Objection.
510:12:11 THE WITNESS: Part of our process in610:12:12 handling repurchases was to verify what an investor710:12:16 was telling us.810:12:17 BY MR. CALAMARI:910:12:17 Q. Okay. And did the information ever come1010:12:21 back -- and did the results of your investigation1110:12:28 ever include some information that might support the1210:12:33 claim and some information that might suggest1310:12:38 rejection of the claim?1410:12:39 MR. TANDY: Objection.1510:12:44 THE WITNESS: I mean, I think -- and, again,1610:12:46 I mean, it's -- there's not a simple answer here1710:12:50 because, you know, we also have to look. If an1810:12:52 investor does not have a value rep and I had an1910:12:56 appraisal that didn't support the value, that's not2010:12:58 relevant to the claim. I mean, and I'm just using2110:13:00 this as a hypothetical. I'm not saying that2210:13:02 happened.2310:13:02 So there are times where, because of the2410:13:05 contract with the investor, the information isn't2510:13:08 even relevant to the claim. So then I would not, you
Page 924
110:13:15 know, give them a copy of that.
210:13:19 I mean, it's just -- it's so hypothetical,
310:13:20 I'm just -- it's hard to answer something like that.
410:13:24 You have to look at the contracts. You have to look
510:13:27 at what the investor's requesting. You have to look610:13:29 at all the information before you know what's
710:13:31 relevant to that claim.
810:13:32 BY MR. CALAMARI:
910:13:32 Q. Well, all I'm trying to find out is whether,
1010:13:35 after you looked at all the information that was
1110:13:37 relevant to the claim, did you pick and choose what
1210:13:40 you would provide to the investor? Or did you give
1310:13:42 the investor all information that was relevant to the
1410:13:45 claim?
1510:13:45 MR. TANDY: Objection.
1610:13:48 THE WITNESS: If we felt the information was
1710:13:50 relevant to the claim, I believe we would have
1810:13:54 provided it.
1910:13:55 BY MR. CALAMARI:
2010:13:55 Q. Okay. And you would not have withheld
2110:13:58 information that tended not to support your position.
2210:14:03 MR. TANDY: Objection.
2310:14:04 BY MR. CALAMARI:
2410:14:05 Q. Is that correct?
2510:14:05 A. If we believed that information is relevant
Page 925
110:14:10 to the claim, we would provide it. I -- I mean, I
210:14:15 don't know what else to say.
310:14:16 Q. And all you need to say is "yes" or "no."
410:14:20 Even if that information did not support
510:14:22 your position?610:14:23 MR. TANDY: Objection.
710:14:24 THE WITNESS: See, you're trying to make it
810:14:25 too simplistic. Because when I'm looking at a claim,
910:14:28 I'm looking at the claim that comes in. I'm looking
1010:14:33 at what the claimant has come to me for. I'm looking
1110:14:34 at the contract. I'm looking at all the information.
1210:14:35 So when you say a hypothetical like this, I
1310:14:38 can't tell you what's relevant, what's not relevant.
1410:14:41 I don't have any idea what you're talking about me
1510:14:43 having. I just -- I -- it's just not something I can
1610:14:46 answer a "yes" or a "no" to.
1710:14:47 BY MR. CALAMARI:
1810:14:48 Q. Okay. And you can't answer "yes" or "no" to
1910:14:51 the question of whether you picked and choosed [sic]
2010:14:53 information to give back to the investor?
2110:14:55 MR. TANDY: Objection.
2210:14:57 THE WITNESS: No.
2310:14:58 BY MR. CALAMARI:
2410:14:58 Q. No. Okay.
2510:14:59 And you can't answer the question "yes" or
Page 926
110:15:01 "no" as to whether you gave information that
210:15:04 supported your decision but withheld information that
310:15:07 did not support your decision?
410:15:09 MR. TANDY: Objection.
510:15:11 THE WITNESS: It seems kind of hard to me610:15:13 that you could have such diverse information. But --
710:15:16 but no, I can't answer that.
810:15:16 BY MR. CALAMARI:
910:15:17 Q. You can't answer that "yes" or "no"?
1010:15:18 A. No, because it's -- I guess it's just -- I
1110:15:21 don't know how I could even have one that supports
1210:15:24 and one that doesn't. I mean, that just seems kind
1310:15:27 of --
1410:15:27 Q. Well, here's a hypothetical. You're trying
1510:15:29 to get information about the income, the income of
1610:15:33 a -- a particular borrower, and you get two pieces of
1710:15:39 information that's directly contradictory. And you
1810:15:42 make a decision that the piece of information that
1910:15:45 you have that supports your rejection of the claim is
2010:15:49 the more persuasive of the two pieces of information.
2110:15:53 Do you nonetheless give the investor both
2210:15:56 pieces of information?
2310:15:58 MR. TANDY: Objection.
2410:16:02 THE WITNESS: I mean, if you've got a full
2510:16:03 doc loan and you have income information, I don't
-
7/30/2019 MBIA Insurance Corporation v. Countrywide Home Loans Inc., Exhibit 70
19/91
a6984548-ea1c-495c-8b4e-555
CONTAINS HIGHLY CONFIDENTIAL INFORMATION
CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
17 (Pages 927 to 930)
Page 927
110:16:05 know how you're going to have two different income210:16:08 documentations. I just -- I -- I'm just not seeing310:16:12 this.410:16:12 BY MR. CALAMARI:
510:16:13 Q. You can't see that happening?610:16:14 A. No. If I send a verification to the710:16:16 employer and he sends me a verification back, he810:16:19 wouldn't send me two of them.910:16:21 Q. Well, what if you got a -- a statement from1010:16:26 an employer that was contradictory to a pay stub --1110:16:32 MR. TANDY: Objection.1210:16:32 BY MR. CALAMARI:1310:16:33 Q. -- that you received?1410:16:34 MR. TANDY: Objection.1510:16:35 THE WITNESS: If we had written1610:16:37 documentation, our policy was to obtain written1710:16:39 documentation back. I mean, we asked for the1810:16:43 information in writing.1910:16:47 BY MR. CALAMARI:2010:16:48 Q. And I'm asking you, did it never occur in2110:16:51 all of your work and in all of your investigations2210:16:54 that you had contradictory pieces of information that2310:16:56 came back?2410:16:57 MR. TANDY: Objection.2510:16:59 THE WITNESS: I mean, I'm not recalling
Page 928
110:17:02 that.
210:17:03 BY MR. CALAMARI:
310:17:04 Q. You can't recall any situation like that?
410:17:06 MR. TANDY: Objection.
510:17:07 THE WITNESS: No. I mean, not something610:17:12 that -- I mean, you can have an occupancy where one
710:17:17 says that they live there and one said they didn't.
810:17:19 But you have to look at the preponderance of
910:17:21 evidence. I mean, I've seen that on Fannie Mae loans
1010:17:24 but --
1110:17:24 BY MR. CALAMARI:
1210:17:25 Q. Okay. Well, that -- that's a good example.
1310:17:27 What would you -- in that question, when you
1410:17:29 looked at the preponderance of evidence, what would
1510:17:31 you supply the investor?
1610:17:33 MR. TANDY: Objection.
1710:17:35 THE WITNESS: Typically it's the LexisNexis
1810:17:39 and we give them a copy of it.
1910:17:39 BY MR. CALAMARI:
2010:17:40 Q. Both pieces of information?
2110:17:42 A. It's on the same --
2210:17:43 MR. TANDY: Objection.
2310:17:43 THE WITNESS: -- pieces of information.
2410:17:44 BY MR. CALAMARI:
2510:17:44 Q. Okay. All right. We'll come back to this.
Page 929
110:17:50 We were talking about the repurchase
210:17:51 oversight group, and when was that formed?
310:17:57 MR. TANDY: Objection.
410:17:57 THE WITNESS: I can't tell you the exact
510:17:59 date. I mean, I don't recall exactly.610:18:00 BY MR. CALAMARI:
710:18:00 Q. Can you tell me the approximate time?
810:18:04 A. I believe '09.
910:18:07 Q. And can you describe again the function of
1010:18:11 the repurchase oversight group?
1110:18:13 MR. TANDY: Objection.
1210:18:15 THE WITNESS: That department was to oversee
1310:18:17 the repurchase process, you know, all aspects of it.
1410:18:21 You know, handle, you know, bulk repurchases. You
1510:18:26 know, interface with the investor audit department
1610:18:29 and investors. It was, you know, a group that
1710:18:31 oversaw the process.
1810:18:31 BY MR. CALAMARI:
1910:18:35 Q. And what was their role? Did -- what was
2010:18:39 their result -- role other than overseeing the
2110:18:41 process?
2210:18:42 MR. TANDY: Objection.
2310:18:50 THE WITNESS: I -- their -- I mean, I don't
2410:18:53 know. They had -- I don't know. I mean, they had
2510:18:55 jobs in addition to that, but I don't know what their
Page 930
110:18:58 role is other than overseeing the process.210:19:00 BY MR. CALAMARI:310:19:01 Q. Did they -- did they have to approve410:19:03 repurchases?
510:19:04 MR. TANDY: Objection.610:19:05 THE WITNESS: Not individual loan level710:19:07 repurchases, no.810:19:08 BY MR. CALAMARI:910:19:08 Q. Did they have to approve repurchases as a1010:19:12 policy matter?1110:19:13 MR. TANDY: Objection.1210:19:16 THE WITNESS: Excuse me, that -- as a1310:19:17 policy?1410:19:19 BY MR. CALAMARI:1510:19:20 Q. Yeah.1610:19:21 MR. TANDY: Objection.1710:19:25 THE WITNESS: No.1810:19:25 BY MR. CALAMARI:1910:19:26 Q. Did they set standards for repurchases?2010:19:30 MR. TANDY: Objection.2110:19:33 THE WITNESS: They could set standards as2210:19:34 far as what we reque- -- required come in as part of2310:19:40 the repurchase request.2410:19:40 THE REPORTER: I'm sorry. I missed words.2510:19:40 We could set standards --
-
7/30/2019 MBIA Insurance Corporation v. Countrywide Home Loans Inc., Exhibit 70
20/91
a6984548-ea1c-495c-8b4e-555
CONTAINS HIGHLY CONFIDENTIAL INFORMATION
CYNTHIA SIMANTEL - 8/24/2012
1-800-325-3376 www.merrillcorp.com/law
Merrill Corporation - New York
18 (Pages 931 to 934)
Page 931
110:19:40 THE WITNESS: They could set standards for
210:19:41 what we required to come in as part of the repurchase
310:19:43 request, you know, the information that we required
410:19:45 the investor to give us.
510:19:46 BY MR. CALAMARI:610:19:46 Q. Did you have to report to them about the
710:19:48 status of repurchases?
810:19:50 MR. TANDY: Objection.
910:19:52 THE WITNESS: A summary-type report.
1010:19:55 BY MR. CALAMARI:
1110:19:55 Q. And what form did the summary report take?
1210:20:00 A. It was a report that showed, you know, the
1310:20:02 repurchases that we had, the approvals, the re-sends,
1410:20:06 the in-process. It was just a summary of the status
1510:20:08 of the repurchases that were going through our
1610:20:10 system.
1710:20:10 Q. Did that go out on a monthly basis or a
1810:20:13 weekly basis?
1910:20:16 A. The ROG meeting was a monthly meeting.
2010:20:19 Q. And was it purely informational or was it
2110:20:35 also a necessary approval in order to effectuate
2210:20:39 repurchases?
2310:20:41 MR. ALLAN: Objection.
2410:20:43 THE WITNESS: They did not have to approve
2510:20:46 loan level repurchases, no. They could be done
Page 932
110:20:48 without any interaction with the committee.
210:20:50 BY MR. CALAMARI:
310:20:50 Q. Okay. And did they ever set standards for
410:20:58 how many loans might be repurchased in any given
510:21:01 period?610:21:01 MR. TANDY: Objection.
710:21:08 THE WITNESS: No. I mean, we had what they
810:21:12 called -- we had a limit that, if we reached that in
910:21:16 a month, we just had to let them know so we could
1010:21:18 increase that limit just so they could keep track of
1110:21:21 how many we were approving.
1210:21:22 BY MR. CALAMARI:
1310:21:29 Q. What do you mean by "we had a limit that if
1410:21:32 we reached that"? What kind of limit did you have?
1510:21:35 MR. TANDY: Objection.
1610:21:38 THE WITNESS: It was just, you know, you set
1710:21:39 aside X amount of dollars for repurchases. And when
1810:21:42 you're going over that in a mont