De La Rosa LaFontaine v. Mechkowski et al

Filing 20

ORDER: Accordingly, counsel for Petitioner and Respondents are directed to appear before the Court for a status conference on Thursday, March 19, 2020 at 11 a.m. in Courtroom 20-C. (As further set forth in this Order.) (Status Conference set for 3/19/2020 at 11:00 AM in Courtroom 20C, 500 Pearl Street, New York, NY 10007 before Judge John F. Keenan.) (Signed by Judge John F. Keenan on 2/20/2020) (cf)

Case 1:09-md-02013-PAC Document 57

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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JACQUELINE DE LA ROSA LAFONTAINE,

UNITED STATES DISTRICT COURT
Petitioner,
SOUTHERN DISTRICT OF NEW YORK
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-againstIn re FANNIE MAE 2008 SECURITIES
:
LITIGATION
:
SCOTT MECHKOWSKI, CHRISTOPHER
:
SHANAHAN, JEH JOHNSON, and LORETTA :
LYNCH,
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Filed 09/30/10 Page 1 of 45
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: 02/20/2020

No.Civ. 7831 (PAC)
08 15 Civ. 4251 (JFK)
ORDER
09 MD 2013 (PAC)

OPINION & ORDER

Respondents.
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JOHN F. KEENAN, United States District Judge:
HONORABLE PAUL A. CROTTY, United States District Judge:

On February 14, 2020, the United States Court of Appeals
BACKGROUND1
for the Second Circuit vacated and remanded the Court's August
The early years of this decade saw a boom in home financing which was fueled, among
17, 2015 Opinion & Order, which granted in part and denied in
other things, by low interest rates and lax credit conditions. New lending instruments, such as
part Petitioner's habeas corpus petition for immediate release
subprime mortgages (high credit risk loans) and Alt-A mortgages (low-documentation loans)
from detention.
kept the boom going. Borrowers played a role too; they took on unmanageable risks on the
Accordingly, counsel for Petitioner and Respondents are
assumption that the market would continue to rise and that refinancing options would always be
directed to appear before the Court for a status conference on

available in the future. Lending discipline was lacking in the system. Mortgage originators did
Thursday, March 19, 2020 at 11 a.m. in Courtroom 20-C.
not hold these high-risk mortgage loans. Rather than carry the rising risk on their books, the
SO ORDERED.

, r-1/

originators sold their loans into the secondary mortgage market, often as securitized packages
Dated: New York, New York
( grew J
known as February 20, securities (“MBSs”). MBS markets~ , almost exponentially.
mortgage-backed 2020
John F. Keenan
United States District
But then the housing bubble burst. In 2006, the demand for housing droppedJudge
abruptly

~~

and home prices began to fall. In light of the changing housing market, banks modified their
lending practices and became unwilling to refinance home mortgages without refinancing.

1

Unless otherwise indicated, all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,
dated June 22, 2009. For purposes of this Motion, all allegations in the Amended Complaint are taken as true.

1