In-House Counsel’s Role in the Structuring of Mortgage-Backed Securities

Authors

Steven L. Schwarcz, Duke Law SchoolFollow
Shaun Barnes
Kathleen G. Cully

Document Type

Article

Publication Date

2012

Keywords

in-house counsel, mortgage-backed securities, financial crisis, special purpose vehicles, SPV, special-purpose entities, SPEs

Abstract

The authors introduce the financial crisis and the role played by mortgage-backed securities. Then describe the controversy at issue: whether, in order to own and enforce the mortgage loans backing those securities, a special-purpose vehicle “purchasing” mortgage loans must take physical delivery of the notes and security instruments in the precise manner specified by the sale agreement. Focusing on this controversy, the authors analyze (i) the extent, if any, that the controversy has merit; (ii) whether in-house counsel should have anticipated the controversy; and (iii) what, if anything, in-house counsel could have done to avert or, after it arose, to mitigate the controversy. Finally, the authors examine how the foregoing analysis can help to inform the broader issue of how in-house counsel should address complex legal transactions.

Citation

Shaun Barnes et al., In-House Counsel’s Role in the Structuring of Mortgage-Backed Securities, 2012 Wisconsin Law Review 521-547