Greenwich Financial Services Distressed Mortgage Fund 3, LLC v. Countrywide Financial Corp.
Plaintiffs Greenwich Financial Services Distressed Mortgage Fund 3, LLC and QED LLC filed a putative class action against Countrywide Financial Corporation and its subsidiaries. Plaintiffs, who hold mortgage-backed securities, claimed that Countrywide's modifications to mortgage loans, stemming from a settlement with state Attorneys General, obligate Countrywide to repurchase these loans as per the Pooling and Servicing Agreements. Countrywide removed the case to federal court, asserting jurisdiction under the Class Action Fairness Act (CAFA) and 28 U.S.C. § 1331, arguing that the claims involved substantial federal questions under the Truth-in-Lending Act (TILA). The Court, under Judge Richard J. Holwell, concluded that neither CAFA's securities-related exception nor TILA provided the necessary grounds for federal subject matter jurisdiction. As a result, the plaintiffs' motion to remand the case to state court was granted.