IndyMac Mortgage-Backed Securities

Berman Tabacco was sole lead counsel in this class action, representing lead plaintiffs Wyoming Retirement System and Wyoming State Treasurer, and class representative Los Angeles County Employees Retirement Association. The case settled for $346 million, which is one of the largest mortgage-backed securities (“MBS”) class action settlements. The case involved the securitization and sale of 50 MBS offerings issued by now-defunct IndyMac Bank and related entities. The action was brought under the Securities Act of 1933 and alleged that statements in IndyMac’s offering materials for the sale of MBS in 2006-2008 were untrue because they mischaracterized the loan underwriting practices used to originate and acquire the loans that were pooled and securitized to form the MBS. This settlement is extraordinary not only because of its size but also because $340 million of the settlement amount was paid entirely by underwriters who had due diligence defenses. In most other MBS cases, plaintiffs were able to recover the settlement fund monies from the issuing entities who are held to a strict liability standard for which there is no due diligence defense – but the issuing bank here, IndyMac Bank, was no longer in existence when case as commenced.