Exhibit,Appendix: Hsbc Bank Usa, National Association, In Its Capacity As Trustee Of Nomura Home Equity Loan, Inc., Asset Backed Certificates, Series 2007-2 v. Nomura Credit & Capital, Inc.

On January 30, 2013 a Exhibit,Appendix was filed involving a dispute between Hsbc Bank Usa, National Association, In Its Capacity As Trustee Of Nomura Home Equity Loan, Inc., Asset Backed Certificates, Series 2007-2, and Nomura Credit & Capital, Inc., for Commercial Division in the District Court of New York County.

Preview
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Exhibit 24
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK

NOMURA ASSET ACCEPTANCE
CORPORATION ALTERNATIVE LOAN Index No. 653390/2012
TRUST, SERIES 2006-S4, by HSBC
BANK USA, NATIONAL ASSOCIATION, Part 60
in its capacity as Trustee, (Friedman, M.)

Plaintiff,

-against-

NOMURA CREDIT & CAPITAL, INC.,

Defendant.

AMENDED EXPERT REPORT OF ROBERT W. HUNTER

December 6, 2018
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TABLE OF CONTENTS

I. Introduction ...................................................................................................................... 1

A. Scope of Work ...................................................................................................... 1

B. Summary of Opinions .......................................................................................... 3

C. Qualifications and Experience ............................................................................ 6

D. Compensation ..................................................................................................... 10

II. Trust Documents ............................................................................................................ 11

III. The Loans ....................................................................................................................... 12

IV. The Representations and Warranties .......................................................................... 13

A. Representation Regarding Rating Agency Information ................................ 15

B. Representation Regarding Fraud ..................................................................... 16

C. Representations Regarding Taxes, Assessments, and Insurance .................. 18

D. Representations Regarding Compliance with Applicable Law ..................... 19

E. Representation Regarding Material Default ................................................... 20

F. Representations Regarding Appraisals............................................................ 22

G. Representation Regarding Combined Loan-to-Value Ratio.......................... 23

H. Representation Regarding Underwriting Guidelines ..................................... 24

V. General Principles of Prudent and Sound Underwriting ........................................... 26

A. The Purpose of Underwriting ........................................................................... 26

B. Sound Underwriting Involves Evaluation of the Three C’s of Lending ....... 27

1. Character ................................................................................................ 27

2. Capacity .................................................................................................. 28

3. Collateral ................................................................................................ 31

C. Layered Risk....................................................................................................... 32

D. Underwriting Guidelines ................................................................................... 36

i
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1. Documentation Type, Income and Employment................................. 39

2. Assets ....................................................................................................... 46

3. Debts and Credit .................................................................................... 48

4. Collateral Property ................................................................................ 54

5. Occupancy .............................................................................................. 58

6. Insurance and Compliance With Applicable Laws ............................ 60

7. Exceptions and Compensating Factors ................................................ 63

8. Missing Documents ................................................................................ 65

VI. The Review of a Random Sample of Mortgage Loans from the Trust ..................... 67

A. Digital Risk Review ............................................................................................ 67

1. Third Party Sources ............................................................................... 68

B. Hunter and Staff Review ................................................................................... 71

C. Materiality Methodology ................................................................................... 76

VII. Conclusion ...................................................................................................................... 78

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EXPERT REPORT OF ROBERT W. HUNTER

I. Introduction

1. On March 18, 2013, HSBC Bank USA, National Association, solely in its capacity

as Trustee (the “Trustee”) of Nomura Asset Acceptance Corporation Alternative Loan Trust,

Series 2006-S4 (“NAAC 2006-S4” or the “Trust”), brought suit against Nomura Credit & Capital,

Inc. (“NCCI,” “Seller,” or “Defendant”). Based upon my review of the Complaint,1 I understand

that the Trustee alleges that Defendant breached two contracts that relate to the mortgage loans

in the Trust (the “Mortgage Loans”): (1) the Mortgage Loan Purchase Agreement (“MLPA”)2

and (2) the Pooling and Servicing Agreement (“PSA”)3. I further understand that the Trustee

alleges that NCCI breached its representations and warranties in the MLPA and PSA relating to

the character and quality of the Mortgage Loans (the “Representations”) and thereafter failed to

cure or repurchase the breaching Loans after receipt of notice. The Representations are set forth

in Section 8 of the MLPA and are incorporated by reference in the PSA.4

A. Scope of Work

2. I was retained by McKool Smith PC (“McKool”), counsel for the Trustee, to provide

an expert opinion as to whether the Mortgage Loans that NCCI sold to the Trust breached one or

more of the Representations.

1
I understand that the operative complaint is the complaint filed on March 18, 2013.
2
The MLPA is between NCCI (as “Seller”) and Nomura Asset Acceptance Corporation (“NAAC”) (as
“Purchaser”). It is dated September 1, 2006 and was attached as Exhibit B to the Complaint.
3
The PSA is between the Trustee and NAAC (as “Depositor”), NCCI (as “Seller”), GMAC Mortgage Corporation
(as servicer), Ocwen Loan Servicing , LLC (as servicer), and Wells Fargo Bank, N.A. (as securities administrator,
master servicer and custodian”). It is dated as of September 1, 2006 and was attached as Exhibit A to the
Complaint.
4
See Complaint at 1, n. 1; see PSA § 2.03(b)(vii) at page 57 (incorporating by reference the Representations set
forth in § 8 of the MLPA).

1
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3. My assignment was to conduct a re-underwriting review for a sample of Mortgage

Loans (the “Sample Loans” or the “Loans”) from the Trust, and to opine on whether those

Sample Loans breached one or more of the Representations.5 If I determined that a Loan

breached one or more of the Representations, I was asked to determine whether the breaches

“materially and adversely affect[] the value of any Mortgage Loan or the interest therein of the

Purchaser or the Purchaser’s assignee, transferee or designee.”6

4. McKool provided me with the following information: (i) the Complaint; (ii) the

MLPA; (iii) the PSA; (iv) the Offering Circular;7 (v) the Mortgage Loan Schedule (the “MLS”)

describing the Mortgage Loans purchased by NAAC;8 (vi) the loan-level detail files provided to

the Rating Agencies;9 (vii) the underwriting guidelines applicable to the Loans (the

“Underwriting Guidelines”); (viii) the mortgage loan files compiled during the loan origination

process (the “Origination Loan Files”); and (ix) the mortgage loan documents compiled for the

Loans during the loan servicing process (the “Servicing Loan Files,” together with the

Origination Loan Files, the “Loan Files”10). As part of my work, I reviewed the Loan Files,

Underwriting Guidelines, and the Representations made in the PSA and MLPA; researched the

properties that secured the Loans as well as the borrowers of the Loans; and considered relevant

5
This Amended Report differs from my original report only insofar as it incorporates the results of Dr. Kilpatrick’s
code update, and corrects the breach rate where non-material findings had been inadvertently included in the total.
6
MLPA § 9. As is described in greater detail below, pursuant to the MLPA, NCCI sold the Mortgage Loans in the
Trust to its affiliate, NAAC.Pursuant to the PSA, NAAC deposited the Mortgage Loans into the Trust and
conveyed the Mortgage Loans to the Trustee. Concurrently, NAAC also transferred and assigned to the Trustee its
rights under the MLPA. PSA § 2.01.
7
The Offering Circular is dated September 28, 2006 and was attached as Exhibit C to the Complaint.
8
The MLS was produced bearing the Bates number NOM_ZAMBEZIIV 00000001.The MLS is referenced in the
MLPA at § 2 at page 1. As described below, the data in the MLS includes the same or substantially similar loan
level details provided to rating agencies.
9
The loan level data provided to S&P was produced bearing the Bates number NOM_ZAMBEZIIII 01982260. The
loan level data provided to Moody’s was produced bearing the Bates number NOM_ZAMBEZIIV 01784012.
10
The Loan Files include documents created by the borrowers, lenders, underwriters, servicers, and third parties.
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supporting documents regarding the borrowers and property records. The documents that I have

considered and relied on in forming my opinions regarding the Loans are being produced with

this report to the extent not previously produced in the litigation.

5. To reach the opinions in this report, I directly supervised the re-underwriting review

of a random sample of 400 Loans from the Trust.11 This report details my work, findings, and

opinions regarding the review of those Loans.

B. Summary of Opinions

6. As I describe in greater detail below, it is my expert opinion that:

a. 367 of the Loans breached at least one Representation in a manner that, as of

the date of breach and continuously thereafter, has materially and adversely

affected the value of such Mortgage Loans or the interest therein of the

Purchaser or the Purchaser’s assignee, transferee or designee.12

b. 367 of the Loans were incorrectly described on loan level detail provided to

the Rating Agencies in a manner that, as of the date of breach and

continuously thereafter, has materially and adversely affected the value of

such Mortgage Loans or the interest therein of the Purchaser or the

Purchaser’s assignee, transferee or designee.13

c. 178 of the Loans contained at least one misrepresentation that demonstrated

fraud in the origination of the Loan in a manner that, as of the date of breach

and continuously thereafter, has materially and adversely affected the value of

11
I understand that the 400 loans were selected at random pursuant to a sampling exercise conducted by Karl N.
Snow, PhD, which I understand is described in Dr. Snow’s report, filed simultaneously with my own.
12
It is not my opinion that the other mortgage loans were properly underwritten or should have been included in the
Trust. Those loans may have also suffered from defects, but, in my opinion, those defects did not materially
adversely affects the value of the loans.
13
MLPA § 8(i) at page 8.
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such Mortgage Loans or the interest therein of the Purchaser or the

Purchaser’s assignee, transferee or designee.14

d. 131 of the Loans contained at least one misrepresentation that constituted a

material default under the corresponding Mortgage in a manner that, as of the

date of breach and continuously thereafter, has materially and adversely

affected the value of such Mortgage Loans or the interest therein of the

Purchaser or the Purchaser’s assignee, transferee or designee.15

e. 12 of the Loans breached representations and warranties relating to taxes,

assessments and insurance in a manner that, as of the date of breach and

continuously thereafter, has materially and adversely affected the value of

such Mortgage Loans or the interest therein of the Purchaser or the

Purchaser’s assignee, transferee or designee.16

f. 9 of the Loans did not comply with the applicable federal, state or local laws,

including but not limited to truth-in-lending requirements, in a manner that, as

of the date of breach and continuously thereafter, has materially and adversely

affected the value of such Mortgage Loans or the interest therein of the

Purchaser or the Purchaser’s assignee, transferee or designee. 17

g. 100 of the Loans did not satisfy the appraisal standards of Fannie Mae and

Freddie Mac in a manner that, as of the date of breach and continuously

thereafter, has materially and adversely affected the value of such Mortgage

14
MLPA §8(ii) at page 8.
15
MLPA § 8(xii) at pages 9-10.
16
MLPA § 8(iv) at page, (vi) at pages 8-9, and (xi) at page 9.
17
MLPA § 8(vii) at page 9.
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Loans or the interest therein of the Purchaser or the Purchaser’s assignee,

transferee or designee.18

h. 110 of the Loans had a combined loan-to-value (“CLTV”) ratio of more than

100%,19 which, as of the date of breach and continuously thereafter, has

materially and adversely affected the value of such Mortgage Loans or the

interest therein of the Purchaser or the Purchaser’s assignee, transferee or

designee.20

i. 367 of the Loans were not originated in compliance with the Underwriting

Guidelines in a manner that, as of the date of breach and continuously

thereafter, has materially and adversely affected the value of such Mortgage

Loans or the interest therein of the Purchaser or the Purchaser’s assignee,

transferee or designee.21

7. The materials I relied on in preparing this report are contained in the media

accompanying my report and are detailed in Exhibit C. A spreadsheet detailing my review of the

Sample Loans and the data underlying my review is included in Exhibit D. My opinions are

based on my review of the Loan Files, Underwriting Guidelines, re-underwriting results,

information provided to me, my independent research and my more than 40 years of experience

in the banking and mortgage industry. I reserve the right to amend, supplement, or revise my

opinions should new and material information become available to me.

18
MLPA § 8(xxvii) at page 11.
19
The CLTV ratio is the ratio of all of the loans secured by a property to the value of the property.
20
MLPA § 8(xxxiv) at page 12.
21
MLPA § 7(v) at pages 6-7.
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C. Qualifications and Experience

8. I have more than 40 years of experience in the financial services industry, primarily

in banking and mortgage lending. I have worked in every phase of mortgage lending, including

loan processing, loan underwriting, loan servicing, secondary marketing, and investment

management. I have underwritten all types of mortgage loans — both first and second

mortgages, including residential, multi-family, and commercial real estate. I have managed and

traded investment portfolios containing government-sponsored entity22 and private label23

securities composed of subordinate loans, non-performing loans, and prime quality residential

loans.24 I also have over six years of experience as a business consultant to institutions in the

banking and mortgage industry. I have performed credit due diligence on several acquisitions

and investment transactions, reviewed loan originations to identify possible origination fraud,

analyzed securities investment portfolios for a government-sponsored insurance company, and

served as the acting chief credit officer for a large savings and loan association.

9. I have been actively engaged in residential mortgage lending and related work since

1972. Between 1972 and 1982, I worked for Freedom Federal Savings and Loan Association,

then the largest savings and loan association in New England. At Freedom Federal, I served as

the bank’s senior residential loan underwriter and held ultimate approval authority on all

residential loans. My job responsibilities included loan origination, underwriting, and loan

22
Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie
Mac”) are government-sponsored entities formed to stabilize the U.S. residential mortgage market. They guarantee
and purchase loans from mortgage lenders that conform to the criteria that they have established.
23
Private label mortgage backed securities are those that are not guaranteed or issued by government-sponsored
entities Fannie Mae and Freddie Mac. The credit risk associated with these securities is typically rated by credit
rating agencies such as Moody’s and Standard & Poor’s and those ratings are relied upon by investors.
24
A loan that is originated where the borrower has a high credit quality is classified as a prime loan.
A subordinated
loan is a junior debt which the lender can satisfy only after other, senior debts are satisfied.
A non-performing loan
is a loan on which the borrower is not making any interest payments or repaying any principal.
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servicing. In 1976, I started the bank’s secondary marketing activity. I originated, issued, and

sold one of the first Government National Mortgage Association (“Ginnie Mae”)25 multi-family

securities issued by a New England lender. In 1980, I initiated the bank’s loan sales to Fannie

Mae.

10. In 1982, Freedom Federal merged with Northeast Savings, F.A., one of the top ten

largest savings and loan associations in the country, where I worked until 1990. At Northeast

Savings, I served as the senior mortgage investment manager and managed the residential

mortgage portfolio. I was responsible for buying, selling, and trading all types of mortgage

related investments, including mortgage loans, residential mortgage backed securities (“RMBS”)

issued by government-sponsored entities (so-called “agency RMBS”), and by private actors (so-

called “private-label RMBS”). I also directed the in-house team that reviewed loan purchases

and negotiated the bank’s relationship with large mortgage banking companies. While

overseeing Northeast Savings’ loan commitment program, I created the bank’s loan quality

standards, as well as pricing and product guidelines.

11. In September 1991, I joined Shannon Hunter Advisors, a wholly-owned subsidiary

of First Commonwealth Savings Bank. At Shannon Hunter, I was responsible for the analysis,

pricing, and trading of portfolios of residential loans and commercial real estate acquired for the

parent company’s balance sheet and also for trading in the secondary market. I was also

responsible for mitigating losses on under-performing or non-performing assets.

12. In June 1994, I joined Crestar Bank. As the senior mortgage portfolio manager, I

was responsible for managing the portfolio of mortgage-backed and asset-backed securities and

25
Ginnie Mae is a government-owned corporation within the Department of Housing and Urban Development that
guarantees mortgage-backed securities created by approved issuers and backed by mortgages covered by other
federal programs.
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the portfolio of residential whole loans, and I negotiated the bank’s purchase and sale of all

mortgage-related assets. I also served as the portfolio liaison to the Credit Review group on

bank acquisitions, responsible for reviewing the portfolio credit quality, negotiating the terms

and conditions of purchase and sales agreements including representations and warranties both as

a buyer and seller, and establishing the bank’s acquisition price and loan loss reserve analysis. I

developed a credit quality program to analyze and quantify the risk characteristics of loan

acquisitions and sales. I also initiated the bank’s entry into residential asset backed security

investing, working with our credit managers to set up investment and portfolio characteristics. In

January 1999, Crestar merged with SunTrust Bank. After the merger, I was responsible for

managing the Crestar residential loan portfolio activities.

13. In March 2001, I joined Treasury Bank, NA, a subsidiary of Countrywide

Industries,26 which subsequently changed its name to Countrywide Financial Corporation. I

served as Chief Credit Officer (“CCO”), responsible for managing the company’s mortgage

credit risk on both first and second mortgages, including all portfolio reporting, credit quality

management, loan servicing oversight, and vendor management. As CCO, I set up and managed

the bank’s loan loss reserve methodology. As part of my responsibilities, I also set up and

managed Treasury Bank’s Credit Quality Group, which reviewed all loan originations, including

first and second mortgages and home equity lines of credit (“HELOCs”) for compliance with

bank credit requirements. The Credit Quality Group conducted monthly reviews of a random

and adverse sample of all loan acquisitions and reviewed loans for credit and regulatory

26
Although Treasury Bank was an affiliate of Countrywide Mortgage, its activities were separate. Treasury Bank
was supervised by the Office of the Comptroller of the Currency, and I understand that the activities between
Treasury Bank and Countrywide Mortgage were subject to specific restrictions and approval under Sections 23A
and 23B of the Federal Reserve Act. Treasury Bank did not securitize residential mortgage loans, but rather
originated loans for its own portfolio.To the best of my knowledge, while I was employed at Treasury Bank the
loans that I managed were not securitized or sold.
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compliance. When necessary, the Credit Quality Group also tried to remediate non-performing

loans with the loan sellers or arrange for the repurchase of those loans.

14. In 2005, after I left Treasury Bank, I provided consulting services to a community

development bank, City First Bank. I helped the bank revise its commercial loan processing and

credit monitoring systems. I also assisted the bank in changing its appraisal review process to

comply with applicable regulatory guidelines. I worked for City First Bank again from 2007 to

2008 to revise its credit and loan loss reserve methodology to comply with new commercial real

estate loan guidance from the Office of the Comptroller of the Currency. In the interim, in 2006,

I served as the acting Chief Credit Officer of a $50 billion thrift institution, ING Direct, helping

the bank set up a revised portfolio review process and reviewing new products and loan loss

models. Additionally, beginning in 2006 and continuing through 2007, I worked with DirecTex

Holdings, a Texas-based group that was applying to the Office of Thrift Supervision for approval

to transfer the charter of a bank to a new group. I was the designated Chief Risk Manager,

responsible for setting up the bank risk management infrastructure. In 2007, and starting again

in 2012, I worked with Hilltop Advisors on several projects, including conducting a loan review

and pricing analysis of a portfolio of distressed residential loans. With Hilltop Advisors, I also

managed the review of a large mortgage company’s quality control and underwriting processes.

15. In 2008, I joined Amherst Holdings, the holding company for Amherst Securities, a

regional broker-dealer that specializes in mortgage-related investments. At Amherst, I

specialized in mortgage and credit related projects, working with proprietary credit analytics. I

also worked on Amherst’s preliminary reviews and analyses of breaches of representations and

warranties relating to mortgage loans backing RMBS.

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16. I have been a frequent speaker on mortgage industry panels. I graduated from the

Mortgage Bankers Association’s School of Mortgage Banking and have received the MBA’s

professional designation of Master Certified Mortgage Banker (“CMB®”), reflecting

competency in all issues relating to both commercial and residential real estate finance. I have

an M.B.A. in Finance from Clark University and a B.A. in Political Science from Assumption

College.

17. In January 2013, I began consulting on litigation-related matters concerning the

securitization of mortgage loans. I have been engaged as an expert witness by RMBS investors

in several lawsuits involving the underwriting of residential mortgages and potential breaches of

contractual representations and warranties. I also have been qualified as an expert in federal

court and testified in the FHFA v. Nomura trial before Judge Cote in 2015.27

18. A copy of my curriculum vitae, which contains a summary of my professional and

educational experience and a list of all actions in which I have been disclosed as an expert

witness in the last four years, is attached as Exhibit A to this report. A list of all of my

publications is attached as Exhibit B.

D. Compensation

19. I am being compensated for my work in this engagement at a rate of $ per hour

for review related tasks, $ per hour for report writing, and $ per hour for time related to

deposition or court testimony. I am also reimbursed for actual, reasonable travel and out-of-

pocket expenses. The payment of my fees is not contingent upon the opinions I render or the

outcome of this litigation. My opinion has not been affected in any way by the compensation
27
See Federal Housing Finance Agency v. Nomura Holding America, Inc. et al., 104 F. Supp. 3d 441, 522 & 531
(S.D.N.Y. 2015) (“Nomura Opinion & Order”), where Judge Cote described my review as “holistic” and “careful.”
The Second Circuit’s decision affirming Judge Cote’s decision includes an extended discussion of my testimony in
which it agrees with Judge Cote’s conclusions crediting my analysis. See, Fed. Hous. Fin. Agency v. Nomura
Holding Am., Inc., __ F. 3d __ (2nd Circuit, Sept. 28, 2017), slip opinion at 110-120.
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that I have received. I have been assisted in this review by my team of senior loan reviewers.

Shannon Hunter Advisors LLC is compensated between $ and $ per hour for the work

they perform, based on the experience of the reviewer. The payment of fees for these senior loan

reviewers working with me is also not contingent upon the opinions rendered in this case or the

outcome of this litigation.

II. Trust Documents

20. The MLPA, dated September 1, 2006, sets forth the terms and conditions pursuant to

which NCCI sold, and NAAC purchased, the Mortgage Loans that were eventually transferred to

the Trust. The MLPA establishes NCCI’s repurchase obligations for breaches of

Representations that “materially and adversely affect[] the value of any Mortgage Loan or the

interest therein of the Purchaser or the Purchaser’s assignee, transferee or designee.”28 Pursuant

to the MLPA, those repurchase obligations are unaffected by NCCI’s lack of knowledge as to the

inaccuracy of any Representation, where the inaccuracy “materially and adversely affects the

value of the related Mortgage Loan or the interest therein of the Purchaser or the Purchaser’s

assignee, transferee or designee.”29 Therefore, for loans where I discovered material breaches,

any lack of knowledge of the breach on the part of NCCI is irrelevant to my conclusion.

21. The PSA, dated as of September 1, 2006, provides that the Closing Date of the

securitization is September 28, 2006,30 and sets forth the rights and responsibilities of NAAC,

NCCI, the Trustee, and other parties to that agreement. Pursuant to the PSA, NCCI sold its

rights and interests in the Trust Fund to NAAC, and NAAC simultaneously transferred those

28
MLPA § 9 at pages 13-14.
29
MLPA § 9 at pages 13-14.
30
PSA § 1.01 at page 22, § 2.08 at page 64.
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rights and interests to the Trustee.31 Those rights and interests include NAAC’s rights under the

MLPA.32

22. NCCI made the Representations in Section 7 and 8 of the MLPA, as described more

fully below. In Section 2.03 of the PSA, NCCI warranted that the “representations and

warranties set forth in Section 8 of the Mortgage Loan Purchase Agreement are true and correct

as of the Closing Date,”33 and made additional representations as well that are not relevant to this

report.

III. The Loans

23. There were 4,712 Mortgage Loans included in the Trust, with an aggregate

balance of approximately $253,912,479.87 as of September 1, 2006,34 most of which were

originated in 2005 and 2006.35 The Mortgage Loans are comprised of closed-end, fixed-rate,

second-lien mortgages, originated by various entities.36 The principal originators of the

Mortgage Loans were IndyMac Bank and First National Bank of Nevada,37 with the remainder

originated or acquired by, among others, Equifirst Corporation, First Horizon Home Loan

Corporation, Aegis Wholesale Corporation, and Baltimore American Mortgage Corporation.

The Mortgage Loans were originated under various documentation programs, described in more

detail below, and ranging from full documentation programs to so-called “no documentation”

31
PSA § 2.01 at pages 50-52.
32
PSA § 1.01at page 48 (providing that corpus of the Trust Fund consists of the Mortgage Loans as well as NAAC’s
rights under the MLPA).
33
PSA § 2.03(vii) at page 57.
34
Offering Circular at page 28.
35
See NOM_ZAMBEZIIV 00000001.
36
Offering Circular at page 28.
37
On June 30, 2008, First National Bank of Arizona, an affiliate of the First National Bank of Nevada, was merged
into the bank. https://www.occ.treas.gov/news-issuances/news-releases/2008/nr-occ-2008-87.html.
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programs,38 which nonetheless still require the underwriter to verify various aspects of the

borrower’s credit risk profile. Among other characteristics, the Mortgage Loans included loans

issued to finance a purchase transaction as well as to refinance property the borrower already

owned, and were secured by both owner occupied as well as non-owner occupied properties, as

described below.

IV. The Representations and Warranties

24. The Mortgage Loans in the Trust were sold by NCCI under the MLPA. The

MLPA included a set of representations and warranties that NCCI made about the Mortgage

Loans at the time they were sold. Those representations and warranties were detailed in Section

8 of the MLPA,39 and were declared to be “true and correct as of the Closing Date” of the

securitization, as referenced in Section 2.03(b)(vii) of the PSA.40 NCCI also made general

representations and warranties in Section 7 of the MLPA which impact the Mortgage Loans, for

example, concerning the enforceability of the MLPA (§7(ii)), the truth of the statements

contained within the MLPA and related documents (§7(v)), and the ability of NCCI to perform

the covenants contained within the MLPA (§7(vi)). McKool asked me to review specific

Mortgage Loans to determine if those Loans complied with the representations and warranties

made in both Section 7 and Section 8 of the MLPA.

25. In the mortgage industry, it is standard practice for a seller of loans to make

representations and warranties about the loans that it is selling to the buyer. The seller of the

loans has access to information about each loan, including detailed mortgage loan files and

information about how those loans were underwritten. The seller also has the ability to ensure

38
Offering Circular at pages 40-41.
39
MLPA § 8, pages 8-12. .
40
See PSA at page 57.
CONFIDENTIAL 13
FILED: NEW YORK COUNTY CLERK 08/04/2022 05:10 PM INDEX NO. 650337/2013
NYSCEF DOC. NO. 1892 RECEIVED NYSCEF: 08/04/2022

that information about the loans that it is providing to the buyer is accurate. The seller has

performed, or should have performed, a thorough “due diligence” review of the loans that it is

selling. In some cases, especially for loans that are securitized, the buyers of loans do not have

access to the detailed mortgage loan files and other information about the loans. Instead of

undertaking a review of the loans to determine if they are correctly described by the seller,

buyers rely on the representations and warranties that are made by loan sellers. If a loan does not

comply with the representations and warranties, the seller is required to cure the breach or

repurchase the loan. 41

26. The representations and warranties made by the seller identify certain basic

characteristics that are present in each loan, or conditions and criteria that each loan must meet.

These representations and warranties provide a collective baseline for the attributes of each loan.

Case Info

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Melissa Anne Crane Track Judge’s New Case

Case No.

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Document Filed Date

August 04, 2022

Case Filing Date

January 30, 2013

County

Parties

CHERNOV, JOEL A Attorney for the Defendant
CRANER, MATTHEW LAWRENCE Attorney for the Defendant
Darden Restaurants Attorney for the Plaintiff
DELUCIA, EILEEN MONAGHAN Attorney for the Plaintiff
DEMAY, BRENDON THOMAS Attorney for the Plaintiff
DUNOGUE, AGNES Attorney for the Defendant
EBERSOLE, JOSHUA TIMOTHY Attorney for the Defendant
Freedom Trust 2011-2 Non Party
GIUDICE, LAUREN NICOLE Attorney for the Plaintiff
HEALY, DWIGHT A. Attorney for the Plaintiff
HEIDLAGE, BENJAMIN FREDERICK Attorney for the Plaintiff
Holwell Shuster & Goldberg LLP Attorney for the Plaintiff
HOPPIN LEGAL, PLLC Attorney for the Plaintiff
HOPPIN, MARGARET BARRINGER Attorney for the Plaintiff
HOSCHANDER, JEFFREY DAVID Attorney for the Defendant
HSBC BANK USA, NATIONAL ASSOCIATION, in its capacity as Trustee of Nomura Home Equity Loan, Inc., Asset Backed Certificates, Series 2007-2 Plaintiff
ISRAELI, AVI BRIAN Attorney for the Plaintiff
KAHN, DANIEL AARON Attorney for the Defendant
KLEBAN, DAVID SAMUEL Attorney
NELSON, MEREDITH JAYNE Attorney for the Plaintiff
NOMURA CREDIT & CAPITAL, INC. Defendant
Olifant Fund, Ltd., FFI Fund Ltd., and FYI Ltd. Non Party
ORDWAY, DEMIAN ALEXANDER Attorney for the Plaintiff
SELENDY GAY ELSBERG PLLC Attorney for the Plaintiff
SHOLL, HANNAH SUZANNE Attorney for the Plaintiff
SHUSTER, MICHAEL STEVEN Attorney for the Plaintiff
STOVALL, AMIANNA Attorney for the Defendant
SULLIVAN, DANIEL MARTIN Attorney for the Plaintiff
TEPLIN, STEPHANIE ANN Attorney
UNGAR, DORIT Attorney for the Plaintiff
JAYANT TAMBE Attorney
HOWARD SIDMAN Attorney
JULIET BUCK Attorney
ZACHARY MAZIN Attorney
ABDALLAH SALAM Attorney
WILLIAM FOLEY Attorney
JOSEPH BOYLAN Attorney
LERON THUMIM Attorneys for Plaintiffs
TOBY FUTTER Attorneys for Plaintiffs
JOHN ANSBRO Attorneys for Defendants
Richard Jacobsen Attorneys for Defendants
KATHERINE MACO Attorneys for Defendants
ELISABETH MUELLER Attorney
KATHERINE STOLLER Attorney
PHILIPP SMAYLOVSKY Attorney
ALVIN LI Attorneys for Plaintiffs
NATHAN MONROE-YAVNEH Attorneys for Plaintiffs
CHRISTOPHER JOHNSON Attorney
COURTNEY STATFELD Attorney
AYANA RIVERS Attorney
KAREN SEBASKI Attorneys for Plaintiffs
CEALAGH FITZPATRICK Attorney
MATTHEW MOORE Attorney
ADAM GOLDSTEIN Attorney
KEISHA JAMES Attorney
BLAIR KAMINSKY Attorney
DANIEL GOLDBERG Attorney
NEIL LIEBERMAN Attorney
COLIN FITZPATRICK Attorney
ANDREW BREIDENBACH Attorney
ANGELA GIL Attorney
ADAM KIRGIS Attorney
NADIA KLEIN Attorney
DANIEL FLEMING Attorney
DAVID MARK Attorney
KALITAMARA MOODY Attorney
ROBERT SCHEEF Attorney
JOSEPH FRANK Attorney
DAVID SCHIEFELBEIN Attorney
JACK CHEN Attorney
ASHLEY HAMMETT Attorney
LANI PERLMAN Attorneys for Plaintiffs
CASEY HOWARD Attorney
FRED KNOPF Attorneys for Plaintiffs
HARRIS BERKMAN Attorneys for Plaintiffs
LARA ROMERO Attorney
MATTHEW WARGIN Attorney
PAUL LEVINSON Attorneys for Plaintiffs
CINDY MCBENNETT Attorney
JONATHAN KOPPELL Attorneys for Plaintiffs
EMILY SCHULTZ Attorney
MICHAEL FAY Attorney
RACHEL GUPTA Attorney
JANE BYRNE Attorney
D. TRICE Attorney
HOLLY ENGELMANN Attorneys for Plaintiffs
MARTHA PAMPEL Attorney
NANCY PRAHOFER Attorney
PARUL BHATIA Attorney
AMANDA DOLLINGER Attorney
JOHN PAUL Attorney
MARK SULLIVAN Attorneys for Plaintiffs
MICHAEL CARLINSKY Attorney
MARK ZAUDERER Attorney
CRAIG SINGER Attorney
JASON COHEN Attorneys for Defendants
BARAK STEINER Attorney
MICHAEL ONUFER Attorney
JEAN KIM Attorney
BRUCE CLARK Attorneys for Defendants
WILLIAM PORTER Attorney
JONAH PERLIN Attorney
NOAH WEISSMAN Attorney
DORIT BLACK Attorneys for Plaintiffs
CARLA BROWN Attorney
DAVID WOLLMUTH Attorney
JAY HANDLIN Attorney
Ronald Aranoff Attorney
SAMANTHA GLAZER Attorney
PAUL RUGANI Attorneys for Defendants
JENNY KIM Attorneys for Defendants
THOMAS EGLER Attorneys for Plaintiffs
STEPHEN POSS Attorneys for Plaintiffs
WILLIAM BRADY Attorneys for Plaintiffs
Christopher Johnson Attorney
JAMES SERRITELLA Attorney
JARED SIEGEL Attorney
BRENDAN CARROLL Attorney
ANDREW SPILLANE Attorney
LAUREN WEINSTEIN Attorney
BRIAN WEINSTEIN Attorney
JENNIFER DELGADO Attorney
ALEXANDRA DROZ Attorney
JEFFREY SCOTT Attorney
Michael Ware Attorney
PAMELA MILLER Attorney
MONIQUE GAYLOR Attorney
DANIEL GIMMEL Attorney
STEPHEN SELTZER Attorney
MARIA DA SILVA Attorney
Andrew Benard Attorney
CHRISTOPHER FONTENELLI Attorney
EARL KNOTT Attorneys for Plaintiffs
MICHAEL SCHUSTER Attorneys for Plaintiffs
Erik Haas Attorneys for Plaintiffs
BARRY LEVIN Attorneys for Defendants
DAVID WOLL Attorneys for Defendants
MARY VYSKOCIL Attorneys for Defendants
Brian Weinstein Attorneys for Defendants
ELISABETH GRIPPANDO Attorneys for Defendants
ERIK HAAS Attorneys for Plaintiffs
John Ansbro Attorneys for Defendants
DANIEL BROCKETT Attorneys for Plaintiffs
PHILIPPE SELENDY Attorneys for Plaintiffs
PENNY SHANE Attorneys for Defendants
Darrell Cafasso Attorneys for Defendants
MATTHEW LIPPERT Attorneys for Defendants
ANDREW BRAUNSTEIN Attorney
William Foley Attorney
EVAN STEIN Attorney
RICHARD LANDAU Attorney
JONATHAN KOPP Attorney
MICHELLE PARTHUM Attorneys for Plaintiffs
MATTHEW CORMACK Attorneys for Defendants
DANIEL MAGY Attorneys for Defendants
LESLEY CHEN Attorneys for Defendants
DAVID KISTENBROKER Attorney
DANIEL HENDLER Attorney
Christopher Malloy Attorney
P. JOHNSON Attorneys for Plaintiffs
ALEX COHEN Attorneys for Defendants
RYAN NELSON Attorneys for Defendants
PETER SHAKRO Attorneys for Defendants
JORDAN BOTJER Attorneys for Defendants
NATHANIEL BRONSTEIN Attorneys for Defendants
ELIZABETH CURRAN Attorney
ALEXANDER SHAPIRO Attorney
Henry Ricardo Attorneys for Plaintiffs
CORBAN RHODES Attorneys for Plaintiffs
JOEL BERNSTEIN Attorneys for Plaintiffs
LAUREN MOSKOWITZ Attorneys for Defendants
HENRY NEWMAN Attorney
RICHARD KIM Attorney
JAMES BOYLAN Attorney
DAVID HOLAHAN Attorney
William Russell Attorney
Isaac Rethy Attorney

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Exhibit,Appendix: Hsbc Bank Usa, National Association, In Its Capacity As Trustee Of Nomura Home Equity Loan, Inc., Asset Backed Certificates, Series 2007-2 v. Nomura Credit & Capital, Inc.

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