Lawsuits Against US Bancorp and Bank of America Dismissed

first_img Bank of America RMBS Complaints U.S. Bancorp 2015-05-19 Seth Welborn May 19, 2015 545 Views A federal judge dismissed claims in lawsuits against U.S. Bancorp and Bank of America accusing the two banks of failing in their duties as trustees for residential mortgage-backed securities that were allegedly found to have defects after they were sold, causing billions of dollars in losses to investors.U.S. District Judge Katherine Forrest in Manhattan dismissed the claims against the two banks in three separate decisions. In the first decision, a group of institutional investors, BlackRock Inc, Allianz SE’s Pacific Investment Management Co and TIAA-CREF sued U.S. Bancorp, claiming the bank was responsible for 843 toxic mortgage-backed securities totaling about $778 billion in collateral. Forrest ruled that the claims were not pleaded correctly on 33 of the trusts and that the remaining 810 trusts did not fall under her jurisdiction.In the second decision, Forrest dismissed a claim from the National Credit Union Administration, ruling that the NCUA lacked standing to sue the two banks because the certificates for 74 trusts, which were purchased by five corporate credit unions that later failed, had been re-securitized. Likewise, Forrest ruled that investors based in Ireland and the Cayman Islands lacked standing to sue the two banks. All of the plaintiffs were given a chance to amend their complaints.An attorney for BlackRock, Allianz, and TIAA-CREF, when reached by email, declined to comment on the judge’s decision. Bank of America spokesman Lawrence Grayson declined to comment, and U.S. Bancorp spokesman Dana Ripley told DS News, “We are pleased with the rulings.”This is the second victory for Bank of America in court in less than a week regarding its mortgage banking practices. Late last week, a federal judge threw out a suit filed by the City of Los Angeles which claimed the bank engaged in discriminatory lending practices that led to massive defaults, foreclosures, and eventually blight in Los Angeles neighborhoods.A settlement in which Bank of America and U.S. Bancorp agreed to pay $69 million to Washington Mutual in a similar case in which the two banks were accused of failing in their duties as trustees for mortgage-backed securities was approved by Forrest in March. Just as in the three cases that were recently dismissed, Washington Mutual alleged that breaches on the part of the two banks led to massive losses when the financial crisis hit. Lawsuits Against U.S. Bancorp and Bank of America Dismissedcenter_img in Daily Dose, Featured, News, Servicing Sharelast_img

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