In 2008, the United States experienced one of the most serious financial crises in the country`s history. The deterioration of the housing market has led to an increase in the crime rate among borrowers who have insolvent their mortgages, which has increased WaMu`s demand for buybacks of securitized subprime loans. In early March 2008, OTS and FDIC waMu urged more capital raising or finding a buyer. See e.g. 327 out of 3. JPMC, other banks and various private equity groups were invited to participate in the potential transaction. ID. JPMC conducted a “comprehensive due diligence process,” resulting in “the most critical component. .
. . was the assessment of losses in WaMu`s consumer credit portfolios, particularly in Id. On March 31, 2008, JPMC offered to purchase WaMu at a cost of $5 per share, based on the amount of losses made on certain WaMu loan portfolios. Id. at 5. It was envisaged that a takeover would be taken through an open banking transaction.7 See Ex. 486 [cf. 164-10]. WaMu, however, received a capital injection from a private equity firm and remained independent.
E.g. 327 to 5. Later on the afternoon of September 24, 2008, Mr. Eitel proposed for JPMC a review of Section 2.5 (“borrower`s receivables”) to David Gearin of FDIC. Z.78 [Dkt. 159-2]. Mr. Eitel`s proposal was intended to exclude from any “accepted liabilities” any claim of a “direct or indirect purchaser of securities of a mortgage securitization vehicle owned or sponsored by Failed Bank or one of its subsidiaries or related companies prior to the bank`s closing.” Id. Mr Gearin sent the email to Richard Aboussie of the FDIC and reported that “[d] he [JPMC] lawyers say the provision does not cover the liability of assets in securitizations and suggests this premium – I have not given any assurance that we will make any changes.” Z.B. 79 [Dkt 159-3]. Mr. Aboussie replied to Mr.
Gearin that “Jim Wigand [also of the FDIC] stated that he understood and intended to pass on to the receiving bank all debts related to the sale of credits (i.e. representation/guarantee/buyback claims). Id.M. Gearin then responded to Mr. Eitel`s email by saying, “I don`t think you`re going to see a revised agreement as we`re going to make adjustments to the transaction, which are covered by updated questions and answers.” Z.80 [Dkt 159-4]. Mr. Eitel wrote: “[A] revised contract has just been published. We talked this morning about the fact that the compensation system was not working and we understood that you are rephrasing it.