Motion to Dismiss Granted in Part in $1.75B Repurchase Suit Against BofA, Countrywide

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On May 29, Justice Eileen Bransten in the Supreme Court of the State of New York partially granted a motion to dismiss in a case by U.S Bank against Bank of America and Countrywide seeking the repurchase of 4,484 mortgages securitized in a $1.75 billion RMBS trust. Justice Bransten held that U.S. Bank could not, under the relevant contracts, seek repurchase of all loans in the trust on the basis of alleged “pervasive breaches” of representations and warranties related to mortgage loans, and therefore dismissed the portion of U.S. Bank’s complaint seeking complete repurchase of all loans. Justice Bransten, however, held that U.S. Bank’s claim for repurchase of 495 individual loans for which U.S. Bank had provided notice of breach to Countrywide, and that Countrywide had not yet repurchased, was adequately pled and thus could proceed. Order.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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