Preview
FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013
NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022
Exhibit 39
FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013
NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022
Page 1
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
IN RE: PART 60 RMBS PUTBACK LITIGATION
_______________________________________
NOMURA ASSET ACCEPTANCE Index No.
CORPORATION ALTERNATIVE LOAN 777000/2015
TRUST, SERIES 2006-S3, by HSBC
BANK USA, NATIONAL ASSOCIATION,
in its capacity as Trustee
pursuant to a Pooling and IAS Part 60
Servicing Agreement, dated as
of July 1, 2006,
Plaintiff,
-against-
NOMURA CREDIT & CAPITAL, INC.,
Defendant.
_______________________________________
NOMURA CREDIT & CAPITAL, INC.,
Third-Party Plaintiff,
-against-
WELLS FARGO BANK, N.A., and
OCWEN LOAN SERVICING, LLC,
Third-Party Defendants.
_______________________________________
VOLUME I
PAGE 1 - 304
VIDEOTAPED REMOTE DEPOSITION OF
PETER M. ROSS
Wednesday, February 17, 2021
9:00 a.m. Eastern Standard Time
Reported by:
GRETA H. DUCKETT, CCR, RPR, CRR, CVR-S, RVR-M-S
JOB NO.: SY001225
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Page 182 Page 184
1 BY MR. CHERNOV: 1 hurdle, just like a missing document is.
2 Q. Welcome back, Mr. Ross. I'd like 2 Q. So just to be clear, I understand
3 to continue sort of where we left off. In your 3 you're saying that your understanding was that,
4 experience, are servicers aware that sponsors 4 even if someone wasn't occupying the property
5 make representations and warranties in 5 as their primary residence, even if that's a
6 connection with securitizations, like the ones 6 breach, it wouldn't have a material and adverse
7 we have here? 7 effect on the certificateholders? Is that the
8 A. Well, it's a very general question. 8 position?
9 The answer generally, are servicers aware? I 9 A. The position is that you need to --
10 don't know. I know I was aware. 10 you need to satisfy both sets, both a -- the
11 Q. Were you aware or do you know if 11 fact that it's -- what do you call it -- in
12 servicers are generally aware that sponsors 12 violation of the reps and warranties and that
13 make representations and warranties as a 13 that was the root cause for the loss or more
14 general matter concerning the truth of the 14 likely, the default.
15 borrower's representations? 15 Q. And in your example -- as we're
16 A. Again, I have to say I was aware. 16 discussing, so even if it is a breach of the
17 I don't know what other servicers did or did 17 rep, this wouldn't be the root cause for the
18 not. 18 loss or the default; is that fair?
19 Q. Were you aware that servicers 19 A. To the extent -- to the extent
20 generally -- strike that. 20 that -- well, the answer to your question is --
21 Were you generally aware that 21 and again, outside of these PSAs, because I'm
22 another representation sponsors often make is 22 talking about a general hypothetical, that is
23 that there is no fraud in the origination of 23 essentially what I'm saying, yes.
24 loans? 24 Q. From what you've seen in these
25 A. You're using the word "generally." 25 actions, do you have any reason to believe that
Page 183 Page 185
1 So let's be sure this -- I don't -- in these 1 this repurchase provision or the repurchase
2 PSAs, you'd have to point me to it. If it's a 2 protocol in this case is any different than the
3 general question, yes, many times there is a 3 ones with which you did have experience?
4 rep and warranty like that. 4 MR. STANTON: Form.
5 Q. And that's what I'm talking about, 5 A. I think we're starting to get close
6 not necessarily these PSAs. I'm talking in 6 to only what a reunderwriter would know. When
7 general for these questions. Were you 7 you talk about my experience, my experience was
8 generally aware that another representation 8 not that detailed. So a reunderwriter would
9 that's made is that the borrower intends to use 9 have to establish that -- the fine line that I
10 the property as their primary residence? 10 believe you're describing in your question.
11 A. The answer to that question is 11 Q. But the reunderwriter, in your
12 that -- I'll call it a minor rep and warranty, 12 view, would be looking to see whether -- if I
13 meaning I have never, in the situations that I 13 understand what you're saying -- the default
14 was involved in at PNC, et cetera, just like in 14 was related to the fact that the person wasn't
15 documents, I've never seen that used as a -- 15 using the property as their primary residence?
16 the issue that caused a declaration of breach 16 MR. STANTON: Form.
17 and, therefore, repurchase. 17 (Simultaneous speakers.)
18 Q. Just so I understand, you're saying 18 A. That is my general understanding.
19 that you never saw a breach notice based on an 19 Again, I'm not here as an expert on
20 occupancy representation? 20 reunderwriting.
21 A. Let me refer you back to the 21 Q. But you do have substantial
22 deposition that talked about what is a breach. 22 experience in the RMBS industry; is that fair?
23 And it had two steps. One is not following the 23 A. That's a very general statement
24 PSA. The other is something that causes 24 once again. Yes, I have experience in the
25 damage. In my experience, that's a very tough 25 RMBS -- RMBS industry, but you really need to
47 (Pages 182 to 185)
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Page 190 Page 192
1 that. 1 Q. Do you know if Mr. Lendez is
2 (Technical discussion.) 2 claiming that the servicers, for the most part,
3 BY MR. CHERNOV: 3 would have to review any origination-related
4 Q. In your experience, Mr. Ross, are 4 documents other than the loan application in
5 servicers aware, as a matter of -- as a general 5 order for them to provide Nomura with the
6 matter that when borrowers apply for their 6 notices he says the servicers were obligated to
7 mortgages, they represent how they're going to 7 provide?
8 be using the property? 8 MR. STANTON: Form.
9 A. One, I'm not an originations 9 A. I would ask you -- we need to go to
10 expert. Two, I think it depends on what 10 his report to be sure of that. Would you
11 they're applying for. 11 represent that that's the case?
12 Q. Well, do you have an understanding 12 Q. I'll represent that that's my
13 that most borrowers in RMBS trusts have 13 reading, that the bulk of them, yes, you could
14 represented that they're going to be using the 14 determine that from the loan application.
15 property as their primary residence? 15 A. Okay.
16 MR. STANTON: Form. 16 MR. STANTON: Object to form.
17 A. Again, I don't disbelieve you, but 17 BY MR. CHERNOV:
18 I'm not an expert about which one is the 18 Q. But do you agree with me, Mr. Ross,
19 predominant reason stated. 19 that a servicer could review the loan
20 Q. Well, when you were working as a 20 application if it deemed it appropriate to do
21 servicer, did you understand that most of 21 so, following a borrower's default?
22 the -- the borrowers whose loans you held, that 22 MR. STANTON: Object to form.
23 most of those borrowers were occupying their 23 A. You're into a hypothetical. Let me
24 properties as primary residences? 24 answer it this way: Servicers only look at an
25 MR. STANTON: Form. 25 application and default if there's an issue
Page 191 Page 193
1 A. As a servicer, I'm not concerned 1 with the property, meaning that there's some
2 about the occupancy of the property. I'm only 2 problem with the property description in the
3 concerned that the mortgagor, wherever he or 3 mortgage or possibly to try and locate the
4 she lives, is making their payments. 4 borrower. Other than that, servicers don't
5 Q. Understood. But did you generally 5 look at the application.
6 understand -- did you have that understanding, 6 Q. Nothing precludes them from
7 notwithstanding any particular focus, that 7 looking, though; is that fair?
8 people represented when they took out the 8 MR. STANTON: Form.
9 loans, that they intended to use those 9 A. You're asking a -- you're asking
10 properties as their primary residence? 10 such a nebulous question. The answer, however,
11 MR. STANTON: Form. 11 is sure, anything is possible.
12 A. I never ran a query program looking 12 Q. Well, I believe, in your report you
13 at the occupancy code to determine that, so I 13 made reference to the need for forensic
14 can't, under oath, say that's the case. 14 underwriting to determine if a borrower made
15 Q. Do you have any understanding as to 15 certain misrepresentations. Would this one
16 the -- strike that. 16 need to be a forensic underwriter to look at
17 Mr. Lendez is claiming, in a broad 17 the loan application?
18 sense, that the servicers would have had to 18 A. One -- in answer to your question,
19 review some origination-related documents to 19 one does not have to be a forensic underwriter
20 provide the notice he's claiming should have 20 to look at the application. I believe my
21 had been provided, correct? 21 statement was in terms of reaching a conclusion
22 MR. STANTON: Objection. 22 about a -- about a breach in the PSA.
23 A. I'm sorry. My memory of this 23 Q. All right. Does one need to be a
24 report said that there would be origination 24 forensic underwriter to determine how the
25 documents reviewed, correct? 25 borrower represented on the loan application
49 (Pages 190 to 193)
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Page 194 Page 196
1 how they intended to use the property? 1 borrower's occupancy?
2 MR. STANTON: Form. 2 MR. STANTON: Objection.
3 A. I'm just trying to think about use 3 A. A statement on the application
4 of property. Can I change that to loan 4 about occupancy, even when it varies from what
5 purpose? Because I -- would that work? 5 the servicer is being told, the normal course
6 Q. Sure. 6 of business is that the servicer would continue
7 A. There is a -- there is a box that 7 on and not be concerned about the discrepancy
8 says "purpose of the loan," something along 8 that you're talking about.
9 those lines, yes. 9 Q. How about in the normal course of
10 Q. So one doesn't need to be a 10 servicing, does a servicer ever consider the
11 forensic underwriter to see how the borrower 11 possibility that the borrower misrepresented
12 filled out that box, correct? 12 their income origination?
13 A. That is correct. 13 A. No, they wouldn't be looking back
14 Q. And if the servicer wanted to look 14 at the income verification at time of
15 at that information, they certainly could, 15 originations.
16 right? 16 Q. Well, I'm not asking whether they
17 A. As a general statement, I would not 17 would look back. I understand you're telling
18 want my employees taking an action that has no 18 me that no one looks back. I'm asking you
19 benefit to the servicer. 19 whether they would consider the possibility
20 Q. If Nomura or a sponsor buys back a 20 that the borrower might have misrepresented it,
21 defaulted loan, that insures a timely and 21 misrepresented their income, during the course
22 complete recovery of principal and interest, 22 of normal servicing?
23 doesn't it? 23 A. The servicer doesn't consider
24 MR. STANTON: Object to form. 24 whether it's a misrepresentation. They merely
25 A. I would like to have you say that 25 look at the stated income, stated verbally to
Page 195 Page 197
1 was the case in this -- in this situation, 1 them, and then try to construct a default, try
2 because I don't know all the terms and 2 to construct a solution that works for both the
3 conditions of repurchase under this scenario. 3 trust and the customer.
4 Q. Well, if the repurchase in the 4 Q. And is it the same answer with
5 normal situation in these trusts were 5 respect to the servicer won't consider that the
6 reimburse -- or will constitute a timely and 6 borrower might have misrepresented the nature
7 complete recovery, would you agree that putting 7 of employment at origination?
8 the loan back avoids any loss to the trust? 8 A. That's correct. It is.
9 MR. STANTON: Object. 9 Q. In the course of communications
10 A. Yes. But servicers don't do that. 10 with the borrowers after the borrowers stop
11 Q. I'm just asking the question. You 11 paying, will the servicer try and learn what
12 said you wouldn't want your employees to look 12 changed such that the borrower did stop paying
13 at the loan application. And my question to 13 their mortgage?
14 you is: If by looking at the loan application 14 A. They ask for the reason for
15 you could avoid a loss to the trust, why 15 default. So if the reason for default involves
16 wouldn't you want your employees to look at the 16 something the borrower volunteers about
17 loan application? 17 changing jobs, then they would hear that, yes.
18 MR. STANTON: Objection. 18 Q. And you're saying that as part of
19 A. Because we don't have the skill 19 this conversation, the servicers wouldn't want
20 set, nor are we charged with doing that 20 to know what the borrowers represented their
21 activity. That's -- 21 income was at origination?
22 Q. What skill set do you need to 22 A. That's true. That is correct,
23 review the box the borrower checked with regard 23 because the focus of the servicer is going
24 to occupancy and to compare that with 24 forward, they are attempting to resolve the
25 information the servicer learned concerning the 25 default.
50 (Pages 194 to 197)
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Page 198 Page 200
1 Q. You're not saying it wouldn't be 1 forbearance?
2 helpful to know what the borrower represented 2 A. Yes. And let me premise it. It's
3 when they got the loan in order to have that 3 assuming that those are allowable options under
4 conversation? 4 the investor agreement. The forbearance --
5 A. I'm here to -- to testify on what 5 would you like me to describe the two
6 the normal course of business is. And I'm 6 differences?
7 saying, in the normal course of servicing, that 7 Q. Sure.
8 type of examination doesn't occur. 8 A. Okay. A forbearance is really a
9 Q. Well, if a servicer hears from the 9 repayment plan that that the servicer and the
10 borrower that the borrower is in the same job 10 borrower agree to. And the word "forbearance"
11 with the same employer but now can't afford the 11 means that while that plan is being performed
12 mortgage, would that raise any questions for 12 by the borrower, they will forbear from
13 the servicers as to why the borrower can't pay 13 foreclosing on the loan. A modification is --
14 now if they got the mortgage based on the same 14 the best example during this period was HAMP.
15 job and same employer previously? 15 HAMP arrived at what was considered
16 A. Two parts of that answer. The 16 an affordable payment by changing -- changing
17 servicer would be interested in that fact, but 17 the repayment requirements, on some cases the
18 the causes are numerous. It could be that 18 term and other things, just so that the
19 they're still employed, but they have a loss 19 borrower could afford to make payments going
20 of, say, commission income. It could be that 20 on -- let me finish by saying -- and that was
21 there was another source of income that's no 21 the -- that was the better outcome for the
22 longer there. So would they be interested? 22 investor.
23 Yes. Would they be -- they would be interested 23 Q. In the course of considering either
24 to know the "why" it occurred. 24 a modification or a forbearance, will the
25 Q. Well, let's say the servicer learns 25 servicers ask borrowers to submit
Page 199 Page 201
1 that it's the same job, same employer, it's not 1 financial-related materials?
2 a commission-based, and basically nothing 2 A. It depends on the type of loss
3 changed. Would that raise any questions for 3 mitigation solution they're applying for. Yes.
4 the servicer in terms of the borrower's 4 They may -- may require that.
5 original representations concerning their 5 Q. And if they're considering the
6 income? 6 modification, will the borrowers be asked to
7 A. Not about the -- not about the 7 submit, for example, either financial
8 original representations. I'll give you an 8 information or hardship letter or something of
9 example. The borrower may have incurred 9 that sort?
10 additional debt. They're living higher than 10 A. For example, under the HAMP
11 their income allows. That could be the root 11 program, you're correct on both accounts.
12 cause of the default. 12 Q. Now, there's nothing to stop, am I
13 Q. Let me ask you this one. When the 13 correct, the servicer from -- the servicer will
14 borrowers default and the servicers have these 14 review whatever information is submitted,
15 conversations, the servicers -- if I 15 right?
16 understand, you're saying -- are attempting to 16 A. Normally, that's the case, yes.
17 determine the best course forward. Is that 17 Q. The servicer could easily compare
18 fair? 18 that information to what was in the loan
19 A. That is fair. 19 application; is that fair?
20 Q. And sometimes there will be a 20 A. Again, whether they could or could
21 modification or a forbearance; is that correct? 21 not, it just doesn't happen.
22 A. That's one of the options, yes. 22 Q. And judging the appropriateness of
23 Q. Well, those are different, right? 23 a modification or forbearance, a servicer
24 Would that be two different options: One would 24 wouldn't think it would be helpful to
25 be a modification, and one would be a 25 understand why the borrower couldn't make the
51 (Pages 198 to 201)
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Page 202 Page 204
1 payments in the first instance? 1 it's not part of Ocwen's servicing operations
2 A. There is normally discussion of 2 and that be part -- that's part of something
3 what the root cause of default is. So the 3 different?
4 answer is, would it be helpful? Yes, in my 4 A. I know that generally in the
5 mind, it would be helpful. 5 industry, areas like that are either part of
6 Q. But for those discussions, your 6 originations or part of another entity besides
7 servicer doesn't need to know the starting 7 servicing. That's where my comment is coming
8 point for the borrower's reported income? 8 from.
9 MR. STANTON: Objection. 9 Q. So your understanding is that a
10 A. Industry standards and general 10 group that sends out such notices, it's
11 behavior does not call for that. 11 generally part of the -- just -- I assume
12 Q. Do you know -- strike that. 12 you're saying it would be part of a group that
13 You're aware that Ocwen, we 13 originates mortgages as opposed to services
14 discussed, had a contract and compliance group 14 mortgages?
15 that would send out repurchase notices, 15 A. I just know it's not part of
16 correct? 16 servicing. That's all I really know. I should
17 A. I read that in Mr. Lendez's report, 17 say, they're not normally part of servicing.
18 yes. 18 Q. But when you refer to originations,
19 Q. Were you aware that Wells Fargo 19 you're talking about a group that would be
20 trust administration group and later its 20 responsible for making loans; is that fair?
21 repurchase management team were also -- would 21 That's what you're referencing?
22 also send out such notices? 22 A. In general terms, yes.
23 A. I read the same -- the same 23 Q. Do you know if Ocwen had an
24 statement in Mr. Lendez's report. 24 origination department?
25 Q. Do you know what those groups 25 A. No, I do not.
Page 203 Page 205
1 looked at in connection with sending out 1 Q. Do you know if Wells Fargo has an
2 reports? 2 origination department?
3 A. No, I do not. 3 A. Yes, I do.
4 Q. Or that they would look at loan 4 Q. Do you know whether it's -- do you
5 applications in connection with sending out 5 know if its trust administration group or its
6 reports? 6 repurchase management team are part of that
7 A. I just -- I'm here to talk about 7 origination group?
8 servicing, and I just don't know the answer to 8 A. I don't know the organizational
9 that question. 9 structuring of their trust group versus their
10 Q. Well, those departments are part of 10 retail or whatever type of origination
11 the servicing operations, aren't they? 11 operation.
12 MR. STANTON: Objection. 12 Q. So you don't know whether their
13 A. I have no knowledge of that. 13 trust administration group and their repurchase
14 MR. STANTON: Objection. 14 management team are part of originations, part
15 Misstates the record with respect 15 of servicing, or part of master servicing; is
16 to Wells Fargo, at least. 16 that fair?
17 MR. CHELNEY: Same objection. 17 MR. STANTON: Form.
18 BY MR. CHERNOV: 18 A. (No audible response.)
19 Q. Is it your understanding -- do you 19 Q. I'm sorry. Mr. Ross, I think I
20 have any understanding of what part of Ocwen 20 missed your answer.
21 its contracting and compliance group is part 21 A. I said that's fair.If you'd like
22 of, Mr. Ross? 22 to premise the statement or questions any way,
23 A. I have no understanding of that, 23 I'd be happy to answer with that premise.
24 that I can recall. No. 24 Q. No. I just missed your answer
25 Q. Do you have any basis for thinking 25 altogether.
52 (Pages 202 to 205)
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ERRATA SHEET
Deponent: Peter M. Ross
Date(s): February 17 and 19, 2021
Case: Nomura v. Wells Fargo Bank, N.A.
I wish to make the following changes to the transcript of my deposition, for the following
reasons:
PAGE LINE(S) SHOULD READ REASON
25 17 A. I had contact with four Correction
35 3 understand is thatthere is a first Transcription error
party
43 21 called RealServicing. And then afterwards I Transcription error
48 5 initiatives while with MBA's Loan Clarification
Administration
49 8 excuse me, chairman. Clarification
51 21 It serviced the vast of the Transcription error
majority
53 5 each of the activities were that were being Clarification
conducted in
56 15 Subprime? Transcription error
56 23 No subprime as we define it Grammatical correction
69 17 coverage, which is primarily discovered that Clarification
way
76 2 saying my assignment or in the general Transcription error
industry?
79 9 Excluding the second lien Transcription error
80 18 and to a third-party individual, either Transcription error
104 23 be the result of conversations - which Punctuation
appears to
107 11 agreements are very standard, intended to be Transcription error
123 25 A. We tended to hire for the BPO Transcription error
134 8 servicers; is thatfair? Transcription error
141 21 take actions. It's a judgment call. Transcription error
156 11 possible for itto be a breach, there might be Transcription error
168 16 based on thenormal course of business, Transcription error
would
192 25 application upon default ifthere's an issue Transcription error
200 17 the repayment requirements, in some cases Transcription error
the
227 5 set in my experience that would be necessary Transcription error
to
265 9 servicer. Clarification
276 9 A. Correct. That was not the scope of my Clarification
279 9-10 servicers would surreptitiously extend Transcription error
foreclosure operations just -- or length of
FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013
NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022
279 25 answer your question Clarification
296 25 standard activities, and Pm saying those Transcription error
322 12 A. I'm at Section 3.09. Transcription error
339 6 are the types of things that I experienced Transcription error
346 23 A. In their judgment, they would Transcription error
ten-fold."
357 23 Is that what you mean? Correct direct quote
365 21-22 ifthere's nothing that's outside the Transcription error
parameters, the fact that a claim came in
371 4 have seen information within the materials. Clarification
372 18 evaluations. Transcription error
373 18 Q. And the 2016 timelines, they're Correction
441 3-4 not include reference to whether they did or Transcription error
didn't. Ifthere's something in the
Peter M. Ross
SUBSCRIBED TO AND SWORN BEFORE ME
DAY OF HA SOUY
THIS , 2021 S
s 3
Notary Public
Preview
FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013 NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022 Exhibit 39 FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013 NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022 Page 1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK IN RE: PART 60 RMBS PUTBACK LITIGATION _______________________________________ NOMURA ASSET ACCEPTANCE Index No. CORPORATION ALTERNATIVE LOAN 777000/2015 TRUST, SERIES 2006-S3, by HSBC BANK USA, NATIONAL ASSOCIATION, in its capacity as Trustee pursuant to a Pooling and IAS Part 60 Servicing Agreement, dated as of July 1, 2006, Plaintiff, -against- NOMURA CREDIT & CAPITAL, INC., Defendant. _______________________________________ NOMURA CREDIT & CAPITAL, INC., Third-Party Plaintiff, -against- WELLS FARGO BANK, N.A., and OCWEN LOAN SERVICING, LLC, Third-Party Defendants. _______________________________________ VOLUME I PAGE 1 - 304 VIDEOTAPED REMOTE DEPOSITION OF PETER M. ROSS Wednesday, February 17, 2021 9:00 a.m. Eastern Standard Time Reported by: GRETA H. DUCKETT, CCR, RPR, CRR, CVR-S, RVR-M-S JOB NO.: SY001225 TransPerfect Legal Solutions 212-400-8845 - Depo@TransPerfect.com FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013 NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022 Page 182 Page 184 1 BY MR. CHERNOV: 1 hurdle, just like a missing document is. 2 Q. Welcome back, Mr. Ross. I'd like 2 Q. So just to be clear, I understand 3 to continue sort of where we left off. In your 3 you're saying that your understanding was that, 4 experience, are servicers aware that sponsors 4 even if someone wasn't occupying the property 5 make representations and warranties in 5 as their primary residence, even if that's a 6 connection with securitizations, like the ones 6 breach, it wouldn't have a material and adverse 7 we have here? 7 effect on the certificateholders? Is that the 8 A. Well, it's a very general question. 8 position? 9 The answer generally, are servicers aware? I 9 A. The position is that you need to -- 10 don't know. I know I was aware. 10 you need to satisfy both sets, both a -- the 11 Q. Were you aware or do you know if 11 fact that it's -- what do you call it -- in 12 servicers are generally aware that sponsors 12 violation of the reps and warranties and that 13 make representations and warranties as a 13 that was the root cause for the loss or more 14 general matter concerning the truth of the 14 likely, the default. 15 borrower's representations? 15 Q. And in your example -- as we're 16 A. Again, I have to say I was aware. 16 discussing, so even if it is a breach of the 17 I don't know what other servicers did or did 17 rep, this wouldn't be the root cause for the 18 not. 18 loss or the default; is that fair? 19 Q. Were you aware that servicers 19 A. To the extent -- to the extent 20 generally -- strike that. 20 that -- well, the answer to your question is -- 21 Were you generally aware that 21 and again, outside of these PSAs, because I'm 22 another representation sponsors often make is 22 talking about a general hypothetical, that is 23 that there is no fraud in the origination of 23 essentially what I'm saying, yes. 24 loans? 24 Q. From what you've seen in these 25 A. You're using the word "generally." 25 actions, do you have any reason to believe that Page 183 Page 185 1 So let's be sure this -- I don't -- in these 1 this repurchase provision or the repurchase 2 PSAs, you'd have to point me to it. If it's a 2 protocol in this case is any different than the 3 general question, yes, many times there is a 3 ones with which you did have experience? 4 rep and warranty like that. 4 MR. STANTON: Form. 5 Q. And that's what I'm talking about, 5 A. I think we're starting to get close 6 not necessarily these PSAs. I'm talking in 6 to only what a reunderwriter would know. When 7 general for these questions. Were you 7 you talk about my experience, my experience was 8 generally aware that another representation 8 not that detailed. So a reunderwriter would 9 that's made is that the borrower intends to use 9 have to establish that -- the fine line that I 10 the property as their primary residence? 10 believe you're describing in your question. 11 A. The answer to that question is 11 Q. But the reunderwriter, in your 12 that -- I'll call it a minor rep and warranty, 12 view, would be looking to see whether -- if I 13 meaning I have never, in the situations that I 13 understand what you're saying -- the default 14 was involved in at PNC, et cetera, just like in 14 was related to the fact that the person wasn't 15 documents, I've never seen that used as a -- 15 using the property as their primary residence? 16 the issue that caused a declaration of breach 16 MR. STANTON: Form. 17 and, therefore, repurchase. 17 (Simultaneous speakers.) 18 Q. Just so I understand, you're saying 18 A. That is my general understanding. 19 that you never saw a breach notice based on an 19 Again, I'm not here as an expert on 20 occupancy representation? 20 reunderwriting. 21 A. Let me refer you back to the 21 Q. But you do have substantial 22 deposition that talked about what is a breach. 22 experience in the RMBS industry; is that fair? 23 And it had two steps. One is not following the 23 A. That's a very general statement 24 PSA. The other is something that causes 24 once again. Yes, I have experience in the 25 damage. In my experience, that's a very tough 25 RMBS -- RMBS industry, but you really need to 47 (Pages 182 to 185) TransPerfect Legal Solutions 212-400-8845 - Depo@TransPerfect.com FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013 NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022 Page 190 Page 192 1 that. 1 Q. Do you know if Mr. Lendez is 2 (Technical discussion.) 2 claiming that the servicers, for the most part, 3 BY MR. CHERNOV: 3 would have to review any origination-related 4 Q. In your experience, Mr. Ross, are 4 documents other than the loan application in 5 servicers aware, as a matter of -- as a general 5 order for them to provide Nomura with the 6 matter that when borrowers apply for their 6 notices he says the servicers were obligated to 7 mortgages, they represent how they're going to 7 provide? 8 be using the property? 8 MR. STANTON: Form. 9 A. One, I'm not an originations 9 A. I would ask you -- we need to go to 10 expert. Two, I think it depends on what 10 his report to be sure of that. Would you 11 they're applying for. 11 represent that that's the case? 12 Q. Well, do you have an understanding 12 Q. I'll represent that that's my 13 that most borrowers in RMBS trusts have 13 reading, that the bulk of them, yes, you could 14 represented that they're going to be using the 14 determine that from the loan application. 15 property as their primary residence? 15 A. Okay. 16 MR. STANTON: Form. 16 MR. STANTON: Object to form. 17 A. Again, I don't disbelieve you, but 17 BY MR. CHERNOV: 18 I'm not an expert about which one is the 18 Q. But do you agree with me, Mr. Ross, 19 predominant reason stated. 19 that a servicer could review the loan 20 Q. Well, when you were working as a 20 application if it deemed it appropriate to do 21 servicer, did you understand that most of 21 so, following a borrower's default? 22 the -- the borrowers whose loans you held, that 22 MR. STANTON: Object to form. 23 most of those borrowers were occupying their 23 A. You're into a hypothetical. Let me 24 properties as primary residences? 24 answer it this way: Servicers only look at an 25 MR. STANTON: Form. 25 application and default if there's an issue Page 191 Page 193 1 A. As a servicer, I'm not concerned 1 with the property, meaning that there's some 2 about the occupancy of the property. I'm only 2 problem with the property description in the 3 concerned that the mortgagor, wherever he or 3 mortgage or possibly to try and locate the 4 she lives, is making their payments. 4 borrower. Other than that, servicers don't 5 Q. Understood. But did you generally 5 look at the application. 6 understand -- did you have that understanding, 6 Q. Nothing precludes them from 7 notwithstanding any particular focus, that 7 looking, though; is that fair? 8 people represented when they took out the 8 MR. STANTON: Form. 9 loans, that they intended to use those 9 A. You're asking a -- you're asking 10 properties as their primary residence? 10 such a nebulous question. The answer, however, 11 MR. STANTON: Form. 11 is sure, anything is possible. 12 A. I never ran a query program looking 12 Q. Well, I believe, in your report you 13 at the occupancy code to determine that, so I 13 made reference to the need for forensic 14 can't, under oath, say that's the case. 14 underwriting to determine if a borrower made 15 Q. Do you have any understanding as to 15 certain misrepresentations. Would this one 16 the -- strike that. 16 need to be a forensic underwriter to look at 17 Mr. Lendez is claiming, in a broad 17 the loan application? 18 sense, that the servicers would have had to 18 A. One -- in answer to your question, 19 review some origination-related documents to 19 one does not have to be a forensic underwriter 20 provide the notice he's claiming should have 20 to look at the application. I believe my 21 had been provided, correct? 21 statement was in terms of reaching a conclusion 22 MR. STANTON: Objection. 22 about a -- about a breach in the PSA. 23 A. I'm sorry. My memory of this 23 Q. All right. Does one need to be a 24 report said that there would be origination 24 forensic underwriter to determine how the 25 documents reviewed, correct? 25 borrower represented on the loan application 49 (Pages 190 to 193) TransPerfect Legal Solutions 212-400-8845 - Depo@TransPerfect.com FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013 NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022 Page 194 Page 196 1 how they intended to use the property? 1 borrower's occupancy? 2 MR. STANTON: Form. 2 MR. STANTON: Objection. 3 A. I'm just trying to think about use 3 A. A statement on the application 4 of property. Can I change that to loan 4 about occupancy, even when it varies from what 5 purpose? Because I -- would that work? 5 the servicer is being told, the normal course 6 Q. Sure. 6 of business is that the servicer would continue 7 A. There is a -- there is a box that 7 on and not be concerned about the discrepancy 8 says "purpose of the loan," something along 8 that you're talking about. 9 those lines, yes. 9 Q. How about in the normal course of 10 Q. So one doesn't need to be a 10 servicing, does a servicer ever consider the 11 forensic underwriter to see how the borrower 11 possibility that the borrower misrepresented 12 filled out that box, correct? 12 their income origination? 13 A. That is correct. 13 A. No, they wouldn't be looking back 14 Q. And if the servicer wanted to look 14 at the income verification at time of 15 at that information, they certainly could, 15 originations. 16 right? 16 Q. Well, I'm not asking whether they 17 A. As a general statement, I would not 17 would look back. I understand you're telling 18 want my employees taking an action that has no 18 me that no one looks back. I'm asking you 19 benefit to the servicer. 19 whether they would consider the possibility 20 Q. If Nomura or a sponsor buys back a 20 that the borrower might have misrepresented it, 21 defaulted loan, that insures a timely and 21 misrepresented their income, during the course 22 complete recovery of principal and interest, 22 of normal servicing? 23 doesn't it? 23 A. The servicer doesn't consider 24 MR. STANTON: Object to form. 24 whether it's a misrepresentation. They merely 25 A. I would like to have you say that 25 look at the stated income, stated verbally to Page 195 Page 197 1 was the case in this -- in this situation, 1 them, and then try to construct a default, try 2 because I don't know all the terms and 2 to construct a solution that works for both the 3 conditions of repurchase under this scenario. 3 trust and the customer. 4 Q. Well, if the repurchase in the 4 Q. And is it the same answer with 5 normal situation in these trusts were 5 respect to the servicer won't consider that the 6 reimburse -- or will constitute a timely and 6 borrower might have misrepresented the nature 7 complete recovery, would you agree that putting 7 of employment at origination? 8 the loan back avoids any loss to the trust? 8 A. That's correct. It is. 9 MR. STANTON: Object. 9 Q. In the course of communications 10 A. Yes. But servicers don't do that. 10 with the borrowers after the borrowers stop 11 Q. I'm just asking the question. You 11 paying, will the servicer try and learn what 12 said you wouldn't want your employees to look 12 changed such that the borrower did stop paying 13 at the loan application. And my question to 13 their mortgage? 14 you is: If by looking at the loan application 14 A. They ask for the reason for 15 you could avoid a loss to the trust, why 15 default. So if the reason for default involves 16 wouldn't you want your employees to look at the 16 something the borrower volunteers about 17 loan application? 17 changing jobs, then they would hear that, yes. 18 MR. STANTON: Objection. 18 Q. And you're saying that as part of 19 A. Because we don't have the skill 19 this conversation, the servicers wouldn't want 20 set, nor are we charged with doing that 20 to know what the borrowers represented their 21 activity. That's -- 21 income was at origination? 22 Q. What skill set do you need to 22 A. That's true. That is correct, 23 review the box the borrower checked with regard 23 because the focus of the servicer is going 24 to occupancy and to compare that with 24 forward, they are attempting to resolve the 25 information the servicer learned concerning the 25 default. 50 (Pages 194 to 197) TransPerfect Legal Solutions 212-400-8845 - Depo@TransPerfect.com FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013 NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022 Page 198 Page 200 1 Q. You're not saying it wouldn't be 1 forbearance? 2 helpful to know what the borrower represented 2 A. Yes. And let me premise it. It's 3 when they got the loan in order to have that 3 assuming that those are allowable options under 4 conversation? 4 the investor agreement. The forbearance -- 5 A. I'm here to -- to testify on what 5 would you like me to describe the two 6 the normal course of business is. And I'm 6 differences? 7 saying, in the normal course of servicing, that 7 Q. Sure. 8 type of examination doesn't occur. 8 A. Okay. A forbearance is really a 9 Q. Well, if a servicer hears from the 9 repayment plan that that the servicer and the 10 borrower that the borrower is in the same job 10 borrower agree to. And the word "forbearance" 11 with the same employer but now can't afford the 11 means that while that plan is being performed 12 mortgage, would that raise any questions for 12 by the borrower, they will forbear from 13 the servicers as to why the borrower can't pay 13 foreclosing on the loan. A modification is -- 14 now if they got the mortgage based on the same 14 the best example during this period was HAMP. 15 job and same employer previously? 15 HAMP arrived at what was considered 16 A. Two parts of that answer. The 16 an affordable payment by changing -- changing 17 servicer would be interested in that fact, but 17 the repayment requirements, on some cases the 18 the causes are numerous. It could be that 18 term and other things, just so that the 19 they're still employed, but they have a loss 19 borrower could afford to make payments going 20 of, say, commission income. It could be that 20 on -- let me finish by saying -- and that was 21 there was another source of income that's no 21 the -- that was the better outcome for the 22 longer there. So would they be interested? 22 investor. 23 Yes. Would they be -- they would be interested 23 Q. In the course of considering either 24 to know the "why" it occurred. 24 a modification or a forbearance, will the 25 Q. Well, let's say the servicer learns 25 servicers ask borrowers to submit Page 199 Page 201 1 that it's the same job, same employer, it's not 1 financial-related materials? 2 a commission-based, and basically nothing 2 A. It depends on the type of loss 3 changed. Would that raise any questions for 3 mitigation solution they're applying for. Yes. 4 the servicer in terms of the borrower's 4 They may -- may require that. 5 original representations concerning their 5 Q. And if they're considering the 6 income? 6 modification, will the borrowers be asked to 7 A. Not about the -- not about the 7 submit, for example, either financial 8 original representations. I'll give you an 8 information or hardship letter or something of 9 example. The borrower may have incurred 9 that sort? 10 additional debt. They're living higher than 10 A. For example, under the HAMP 11 their income allows. That could be the root 11 program, you're correct on both accounts. 12 cause of the default. 12 Q. Now, there's nothing to stop, am I 13 Q. Let me ask you this one. When the 13 correct, the servicer from -- the servicer will 14 borrowers default and the servicers have these 14 review whatever information is submitted, 15 conversations, the servicers -- if I 15 right? 16 understand, you're saying -- are attempting to 16 A. Normally, that's the case, yes. 17 determine the best course forward. Is that 17 Q. The servicer could easily compare 18 fair? 18 that information to what was in the loan 19 A. That is fair. 19 application; is that fair? 20 Q. And sometimes there will be a 20 A. Again, whether they could or could 21 modification or a forbearance; is that correct? 21 not, it just doesn't happen. 22 A. That's one of the options, yes. 22 Q. And judging the appropriateness of 23 Q. Well, those are different, right? 23 a modification or forbearance, a servicer 24 Would that be two different options: One would 24 wouldn't think it would be helpful to 25 be a modification, and one would be a 25 understand why the borrower couldn't make the 51 (Pages 198 to 201) TransPerfect Legal Solutions 212-400-8845 - Depo@TransPerfect.com FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013 NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022 Page 202 Page 204 1 payments in the first instance? 1 it's not part of Ocwen's servicing operations 2 A. There is normally discussion of 2 and that be part -- that's part of something 3 what the root cause of default is. So the 3 different? 4 answer is, would it be helpful? Yes, in my 4 A. I know that generally in the 5 mind, it would be helpful. 5 industry, areas like that are either part of 6 Q. But for those discussions, your 6 originations or part of another entity besides 7 servicer doesn't need to know the starting 7 servicing. That's where my comment is coming 8 point for the borrower's reported income? 8 from. 9 MR. STANTON: Objection. 9 Q. So your understanding is that a 10 A. Industry standards and general 10 group that sends out such notices, it's 11 behavior does not call for that. 11 generally part of the -- just -- I assume 12 Q. Do you know -- strike that. 12 you're saying it would be part of a group that 13 You're aware that Ocwen, we 13 originates mortgages as opposed to services 14 discussed, had a contract and compliance group 14 mortgages? 15 that would send out repurchase notices, 15 A. I just know it's not part of 16 correct? 16 servicing. That's all I really know. I should 17 A. I read that in Mr. Lendez's report, 17 say, they're not normally part of servicing. 18 yes. 18 Q. But when you refer to originations, 19 Q. Were you aware that Wells Fargo 19 you're talking about a group that would be 20 trust administration group and later its 20 responsible for making loans; is that fair? 21 repurchase management team were also -- would 21 That's what you're referencing? 22 also send out such notices? 22 A. In general terms, yes. 23 A. I read the same -- the same 23 Q. Do you know if Ocwen had an 24 statement in Mr. Lendez's report. 24 origination department? 25 Q. Do you know what those groups 25 A. No, I do not. Page 203 Page 205 1 looked at in connection with sending out 1 Q. Do you know if Wells Fargo has an 2 reports? 2 origination department? 3 A. No, I do not. 3 A. Yes, I do. 4 Q. Or that they would look at loan 4 Q. Do you know whether it's -- do you 5 applications in connection with sending out 5 know if its trust administration group or its 6 reports? 6 repurchase management team are part of that 7 A. I just -- I'm here to talk about 7 origination group? 8 servicing, and I just don't know the answer to 8 A. I don't know the organizational 9 that question. 9 structuring of their trust group versus their 10 Q. Well, those departments are part of 10 retail or whatever type of origination 11 the servicing operations, aren't they? 11 operation. 12 MR. STANTON: Objection. 12 Q. So you don't know whether their 13 A. I have no knowledge of that. 13 trust administration group and their repurchase 14 MR. STANTON: Objection. 14 management team are part of originations, part 15 Misstates the record with respect 15 of servicing, or part of master servicing; is 16 to Wells Fargo, at least. 16 that fair? 17 MR. CHELNEY: Same objection. 17 MR. STANTON: Form. 18 BY MR. CHERNOV: 18 A. (No audible response.) 19 Q. Is it your understanding -- do you 19 Q. I'm sorry. Mr. Ross, I think I 20 have any understanding of what part of Ocwen 20 missed your answer. 21 its contracting and compliance group is part 21 A. I said that's fair.If you'd like 22 of, Mr. Ross? 22 to premise the statement or questions any way, 23 A. I have no understanding of that, 23 I'd be happy to answer with that premise. 24 that I can recall. No. 24 Q. No. I just missed your answer 25 Q. Do you have any basis for thinking 25 altogether. 52 (Pages 202 to 205) TransPerfect Legal Solutions 212-400-8845 - Depo@TransPerfect.com FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013 NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022 ERRATA SHEET Deponent: Peter M. Ross Date(s): February 17 and 19, 2021 Case: Nomura v. Wells Fargo Bank, N.A. I wish to make the following changes to the transcript of my deposition, for the following reasons: PAGE LINE(S) SHOULD READ REASON 25 17 A. I had contact with four Correction 35 3 understand is thatthere is a first Transcription error party 43 21 called RealServicing. And then afterwards I Transcription error 48 5 initiatives while with MBA's Loan Clarification Administration 49 8 excuse me, chairman. Clarification 51 21 It serviced the vast of the Transcription error majority 53 5 each of the activities were that were being Clarification conducted in 56 15 Subprime? Transcription error 56 23 No subprime as we define it Grammatical correction 69 17 coverage, which is primarily discovered that Clarification way 76 2 saying my assignment or in the general Transcription error industry? 79 9 Excluding the second lien Transcription error 80 18 and to a third-party individual, either Transcription error 104 23 be the result of conversations - which Punctuation appears to 107 11 agreements are very standard, intended to be Transcription error 123 25 A. We tended to hire for the BPO Transcription error 134 8 servicers; is thatfair? Transcription error 141 21 take actions. It's a judgment call. Transcription error 156 11 possible for itto be a breach, there might be Transcription error 168 16 based on thenormal course of business, Transcription error would 192 25 application upon default ifthere's an issue Transcription error 200 17 the repayment requirements, in some cases Transcription error the 227 5 set in my experience that would be necessary Transcription error to 265 9 servicer. Clarification 276 9 A. Correct. That was not the scope of my Clarification 279 9-10 servicers would surreptitiously extend Transcription error foreclosure operations just -- or length of FILED: NEW YORK COUNTY CLERK 08/04/2022 09:15 PM INDEX NO. 650337/2013 NYSCEF DOC. NO. 2784 RECEIVED NYSCEF: 08/04/2022 279 25 answer your question Clarification 296 25 standard activities, and Pm saying those Transcription error 322 12 A. I'm at Section 3.09. Transcription error 339 6 are the types of things that I experienced Transcription error 346 23 A. In their judgment, they would Transcription error ten-fold." 357 23 Is that what you mean? Correct direct quote 365 21-22 ifthere's nothing that's outside the Transcription error parameters, the fact that a claim came in 371 4 have seen information within the materials. Clarification 372 18 evaluations. Transcription error 373 18 Q. And the 2016 timelines, they're Correction 441 3-4 not include reference to whether they did or Transcription error didn't. Ifthere's something in the Peter M. Ross SUBSCRIBED TO AND SWORN BEFORE ME DAY OF HA SOUY THIS , 2021 S s 3 Notary Public