Trustee’s Repurchase Suit Against Quicken Loans Dismissed as Time-Barred

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On August 4, Judge Paul A. Crotty of the Southern District of New York granted Quicken Loans’ motion to dismiss a lawsuit brought by Deutsche Bank National Trust Co. (as Trustee of the GSR 2007-OA1 trust), alleging that Quicken breached its obligation to repurchase defective mortgage loans. Following the First Department’s decision in ACE Securities, Judge Crotty held that the six year statute of limitations for breach of contract began to accrue when Quicken allegedly breached the representations and warranties at issue at the time the loans were sold, not when the Trustee demanded repurchase. He rejected the plaintiff’s argument that the lawsuit was timely because the contract at issue included a so-called “accrual” provision, which specified that the Trustee’s cause of action for repurchase would accrue upon (1) notice of breach (2) failure to cure the breach and (3) Plaintiff’s demand for cure. The court held that the accrual provision could not alter the six-year limitations period because parties cannot agree in advance to extend the statute of limitations before any claims have accrued. Opinion and Order.

Topics:  Banks, Deutsche Bank, Mortgages, Quicken Loans, Repurchases, Trustees

Published In: Civil Procedure Updates, General Business Updates, Finance & Banking Updates, Residential Real Estate Updates, Securities Updates

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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