Reuters – In July, not long after The Economist dubbed its revered founder Seth Klarman “The Oracle of Boston,” the hedge fund Baupost\u00a0abruptly dropped out\u00a0of the litigation challenging Bank of America’s proposed $8.5 billion settlement with investors in Countrywide mortgage-backed securities. Baupost also sold off at least some of its Countrywide notes, signaling that after\u00a0battling fruitlessly\u00a0to get Countrywide and BofA to buy back allegedly deficient underlying loans, the hedge fund had decided to cut its MBS losses and run.<\/p>\n
But it turns out that Baupost isn’t out of the MBS put-back game. On Sept. 4, the Law Debenture Trust Company of New York, as trustee for a Bear Stearns MBS trust, filed an\u00a0amended complaint\u00a0in Delaware Chancery Court demanding that the onetime Bear mortgage lending unit EMC (now part of JPMorgan Chase) buy back 1,141 underlying mortgage loans that allegedly breached the representations and warranties EMC made about them.<\/p>\n