Residential Capital Corporation, through subsidiaries and affiliates, may have misrepresented to investors the risk profile of the mortgage pool securing the Rall Mortgage Asset-Backed Pass-Through Certificates

This is a securities class action against Residential Accredit Loans (Underwriter); Residential Capital Corporation; Homecomings Financial; Credit Suisse First Boston Mortgage Securities Corporation; Credit Suisse Group; Moody's Investors Services; The McGraw-Hill Companies, Inc.; DBRS, Inc., among others.

The class action lawsuit is brought on behalf of purchasers of RALl Mortgage Asset-Backed Pass-Through Certificates (the "Certificates"). The Certificates herein are Mortgage Pass-Through Certificates which means they are collateralized by mortgages originated by Homecomings Financial ("HFN").

The mortgages and liens on the mortgaged properties constituting the Certificates collateral were to be the principal source by which Certificate purchasers were to obtain repayment of their investment plus interest. The Certificate collateral was purportedly originated by HFN pursuant to specific underwriting procedures and guidelines. The Underwriter was obligated to conduct meaningful due diligence to ensure that the Registration Statement contained no material misstatements and omissions including as related to the stated manner in which the mortgages had been originated. The Underwriter received massive fees for their work in connection with the Offering. Based on, inter alia, the Underwriter's due diligence and the representations in the Registration Statement relating the underwriting of the Certificate collateral, rating agencies such as Moody's Investors Service, Inc., Standard & Poor's and DBRS, Inc.(collectively, the "Ratings Agencies") assigned the Certificates among the highest ratings applicable to such debt issues.

At the time of the Offering, the Certificates were issued at approximately par or $1000.00 per Certificate. Following the issuance of the Certificates, disclosures began to emerge revealing that HFN routinely disregarded the underwriting guidelines in originating mortgage collateral. These disclosures were confirmed by substantially higher rates of delinquencies and foreclosures on collateral for such highly-rated debt issues. These disclosures and the poor performance of the collateral caused the Rating Agencies to recognize that the true nature of the collateral had not been properly assessed at the time of the Offering. The Rating Agencies thus applied new "methodologies" to reflect the actual "aggressive underwriting" which had been used to originate the Certificate collateral.

As a result, the rating agencies dramatically downgraded the Certificates. The revelations regarding the true underwriting practices used to originate the collateral and the true value and quality of the Certificate collateral caused the value of the Certificates to substantially collapse.