Deutsche Bank serves as Trustee for 99 “Primary Trusts” and 28 “Secondary Trusts” (collectively the Trusts) at issue in this case. Am. Compl. ¶¶ 2, 3. The Primary Trusts were created, sponsored, and/or serviced by WaMu and its subsidiaries, their predecessors-in- interest, and their affiliates; the Primary Trusts issued RMBS and other securities, holding as collateral mortgage loans originated or acquired by WaMu and sold into the Primary Trusts.
Id. ¶ 2. WaMu also issued securities through 28 Secondary Trusts, which are express or implied third-party beneficiaries of the Primary Trusts, and whose performance is allegedly dependent, in whole or in part, on the performance of the Primary Trusts or other RMBS issued by WaMu. Id. ¶ 3. Defendant WMMSC, now a subsidiary of JPMC, serves as the seller and depositor for 44 of the 99 Primary Trusts. Id. WaMu served as the seller and depositor (or assumed similar roles) for the remaining Trusts. See id.
Each Trust is governed by a series of agreements memorializing the rights and obligations of the contracting parties (the Governing Agreements). See, e.g., Ex. 802 (WaMu Series 2007-HE1 Trust) [Dkts. 161-17—161-21]. Specifically, the Governing Agreements imposed various obligations upon WaMu in its capacity as seller, including the obligation to cure, repurchase, or substitute new mortgage loans for any that were materially defective or in material breach of their representations or warranties. See id.5WaMu accounted for the possibility that it would have to repurchase loans by recording on its balance sheet a reserve for the liabilities associated with repurchasing loans. See Ex. 753 (Expert Report of S.P. Kothari) [Dkt. 167-1], ¶¶ 17-18; Ex. 769 (Expert Report of Thomas Blake) [Dkt. 167-3] at 9. That reserve balance “at any given point in time reflects a dollar estimate of future resources that could be needed to satisfy this contingent liability.” Ex. 753, ¶ 21; Ex. 769 at 9 (“WMB’s repurchase reserve was based on an estimate because in many cases the liability had not yet been identified, meaning that a claim had not been made, or a determination had not been made by WMB that a representation or warranty had been breached and that the breach caused a material adverse effect on the value of a particular loan.”).
The Office of Thrift Supervision (OTS) was an agency within the U.S. Department of the Treasury, established by the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), Pub. L. No. 101-73, 103 Stat. 183 (1989), on August 9, 1989. See Ex. 767 (FDIC Resolution Handbook) [Dkt. 161-12] at 96.6 It was the primary regulator of all federal and many state chartered thrift institutions. Id. As WaMu’s primary regulator, Ex. 912
Ex. 1 (P&A Agreement) [Dkt. 158-1], § 3.1 (JPMC assumes “all right, title, and interest” in all subsidiaries of WaMu). Because JPMC assumed all of the stock of WMMSC, it cannot now disclaim WMMSC liabilities, whatever they turn out to be. See Ex. 498 (Internal JPMC December 2008 presentation) [Dkt. 164-12] at 7 (“JPMC[ ] cannot avoid repurchase liability under the terms of the FDIC agreement for transactions in which Washington Mutual Mortgage Securities Corp. (WMMSC) maintains the liability. This is because JPMC[ ] bought the stock of WMMSC.”); see also FDIC Opp. to JPMC’s Mot. for Summ. J. (FDIC Opp.) [Dkt. 148] at 44- 45. WMMSC does not dispute that it is responsible for its own liabilities, and thus summary judgment will be entered in favor of FDIC with respect to all trusts for which WMMSC was the seller or depositor.
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