NAR settles commission lawsuits for $418 million

Read Now
Servicing

NY District Court Judge expands class of plaintiffs in RBS MBS securities case

Case involves the RALI and Harborview trusts

As banks exposed to mortgage-backed securities litigation try to fight these claims with their sights set on ending long-term exposure, one judge in New York recently gave plaintiffs fighting the Royal Bank of Scotland (RBS) and other parties over mortgage misrepresentations a green light to expand their class of MBS plaintiffs.

Judge Harold Baer of the U.S. Southern District of New York recently filed two opinions in which he accepts the expansion of a class of plaintiffs suing RBS and various parties over the issuance of toxic mortgage-backed securities. At the same time, the judge rejected another claim to expand a plaintiffs’ class currently fighting over another trust that contained securitized mortgages.

The first class of plaintiffs filed a class action lawsuit on behalf of those who acquired interests in the Harborview Mortgage Loan Trusts pursuant to registration statements and prospectus filed back in 2006. Another suit revolved around a class of plaintiffs who acquired interests in the so-called RALI Trusts – or Trusts backed by mortgages later deemed toxic – based on registration statements and prospectuses filed by the Securities and Exchange Commission and Residential Accredited Loans – a subsidiary of Residential Capital.

In both cases, the plaintiffs alleged that the defendants “made false and misleading statements in the offering documents of mortgage-backed securities.”

In the HarborView case, the plaintiffs asked to expand the class of plaintiffs to include the Iowa Public Employees Retirement Systems and Midwest Operating Engineers Pension Trust Fund.

Judge Baer agreed to add them as members of the litigating class after concluding the "proposed Harborview Offerings involve the same defendants and allege the same conduct as the original Harborview offerings, thus their inclusion in the class creates no new conflicts."

In the second case involving the RALI Trust, the plaintiffs asked to expand the class to include the Local 74 USWU Welfare Fund, but the judge ruled against that particular expansion, saying he is "not convinced that such a significant expansion of the class is warranted at this time, or that such an expansion would not disrupt other class certification requirements."

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please