Federal Court Dismisses RMBS Breach of Contract Action Against GreenPoint as Time-Barred

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On January 10, Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York dismissed a lawsuit brought by U.S. Bank National Association as trustee for Lehman XS Trust, Series 2006-4N against GreenPoint Mortgage Funding, Inc. Judge Scheindlin held that the Trustee’s claims for alleged breach of representations and warranties by GreenPoint were barred by the six-year statute of limitations governing contract claims. Relying on recent authority from the Supreme Court of the State of New York Appellate Division, First Department, the court held that claims subject to cure or repurchase requirements accrue at the time of the breach and not at the time of the demand to cure or repurchase. The Court held that the trustee’s claims were untimely because they were filed more than six years from the agreement at issue. Opinion.

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