Home-cooked lawsuits

20 December 2012 By Reynolds Holding

Banks, trustees and even investors had a hand in the debacle surrounding repackaged home loans. With lawyers running up against post-crisis filing deadlines, the last lawsuits are in sight – but the end of the fallout is years away. Breakingviews explains where things stand.

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UBS on Nov. 26 told the U.S. Court of Appeals in New York that the Federal Housing Finance Agency waited too long to sue the bank and 16 other financial institutions for allegedly lying about some $200 billion of mortgage-backed securities sold to Fannie Mae and Freddie Mac.
The suit may be the largest of hundreds of lawsuits seeking damages from banks and others in connection with the origination and securitization of subprime mortgage bonds. Filing deadlines, known as statutes of limitations, are beginning to expire for many such suits concerning securities that failed during the 2008 financial crisis.

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