Wells, Morgan Stanley face investor claims on mortgage bonds
Sept 19 (Reuters) - Investors who hold $73 billion in residential mortgage-backed securities issued by Wells Fargo & Co and Morgan Stanley have sent notices to the banks alleging they did not perform their duties servicing the bonds.
The bondholders are represented by the Gibbs & Bruns law firm that last year reached an $8.5 billion settlement with Bank of America Corp on behalf of investors who held soured mortgage-backed securities. The pact is still awaiting court approval.
The notices cover more than $15 billion of Wells Fargo-issued securities and more than $5 billion of Morgan Stanley-issued securities in which the investors hold 25 percent or 50 percent or more of the voting rights, depending on the security, the law firm said on Wednesday.
In addition, the notices also cover $30 billion of Wells Fargo-issued securities and $23 billion of Morgan Stanley-issued securities in which the investors have significant voting rights but less than 25 percent or 50 percent.
Gibbs & Bruns attorney Kathy Patrick did not immediately respond to a request for comment.
Wells Fargo will "review any communications we receive and respond appropriately," bank spokeswoman Mary Eshet said. Morgan Stanley spokeswoman Mary Claire Delaney declined to comment.