Tuesday, July 21, 2015

Judge Rejects Bid to Dismiss NCUA Lawsuit

Reuters is reporting that a federal judge rejected HSBC Holdings Plc's bid to dismiss a U.S. lawsuit claiming that its failure to perform its duties as trustee for $2.37 billion of residential mortgage-backed securities contributed to the downfall of five federal credit unions.

U.S. District Judge Shira Scheindlin in Manhattan on Monday night rejected HSBC's argument that the March 20 lawsuit concerning its oversight of 37 RMBS trusts dating from 2004 to 2007 came too late, having been filed six years after the first two credit unions failed.

She also said the NCUA could still pursue claims as the credit unions' "conservator" or "liquidating agent," despite having resecuritized their distressed mortgage securities and guaranteed payments on the newly issued notes.

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