Menu Search Facebook Twitter
Search Close
  • Capital Coahuila
  • Capital Hidalgo
  • Capital Jalisco
  • Capital Morelos
  • Capital Oaxaca
  • Capital Puebla
  • Capital Quintana Roo
  • Capital Querétaro
  • Capital Veracruz
  • Capital México
  • Capital Michoacán
  • Capital Mujer
  • Reporte Índigo
  • Estadio Deportes
  • The News
  • Efekto
  • Diario DF
  • Capital Edo. de Méx.
  • Green TV
  • Revista Cambio
Radio Capital
Pirata FM
Capital Máxima
Capital FM
Facebook Twitter
X Welcome! Subscribe to our newsletter and receive news, data, statistical and exclusive promotions for subscribers

Judge Cuts Back $2 Billion Mortgage Bond Case Against UBS

A judge has written that trusts have not proved that UBS took deliberate actions to avoid knowledge that widespread breaches had occurred throughout loans held by the trusts

The logo of Swiss bank UBS is seen on a building in Zurich, Feb. 13, 2013, photo: Reuters/Michael Buholzer
By Reuters Whatsapp Twitter Facebook Share
1 year ago

NEW YORK — A U.S. judge signaled on Tuesday that UBS AG may escape liability for at least a portion of an estimated $2.1 billion of losses stemming from residential mortgage-backed securities it sold in 2006 and 2007 before the U.S. housing market collapsed.

In a 239-page decision, U.S. District Judge Kevin Castel in Manhattan said U.S. Bancorp, as trustee for three trusts issuing the securities, did not show that UBS was willfully blind toward deficiencies in many of the loans.

“The trusts have not proved that UBS took deliberate actions to avoid knowledge that widespread breaches had occurred throughout the loans held by the trusts, thereby triggering UBS’s repurchase obligations,” Castel wrote.

Castel nonetheless said UBS had been put on notice about some problem loans, and would need to repurchase or pay damages on 13 out of 20 he examined.

The judge directed the hiring of a “lead master” to review thousands of loans underlying the securities, before determining the extent to which damages might be warranted.

Representatives for UBS and US Bancorp declined to comment.

The decision follows one of a handful of trials, which Castel heard without a jury, over whether investment banks misled investors about the quality of mortgage-backed securities, a main factor in the 2008 financial crisis.

UBS was previously sued by bond insurer Assured Guaranty Ltd, which was represented by the same lawyers representing US Bancorp, and settled that case in 2013 for $358 million.

At the nearly month-long trial, which ended in May, US Bancorp said UBS breached contractual promises regarding the quality of 9,342 of the 17,082 mortgage loans.

Many of the loans had been issued by lenders specializing in riskier loans, including the former Countrywide Financial Corp, IndyMac Bancorp and American Home Mortgage Investment Corp.

In his decision, Castel also rejected several of U.S. Bancorp’s other claims, including its proposed method for finding that some loans’ loan-to-value ratios were incorrect.

UBS has said the trustee sought to prove liability for 1,630 loans solely with that method.

The number of loans on which UBS might still be liable following Castel’s decision was not immediately clear.

The case is US Bank NA v. UBS Real Estate Securities Inc, U.S. District Court, Southern District of New York, No. 12-07322.



Comments Whatsapp Twitter Facebook Share
More From The News
Latest News

Trump campaign created own rules on sexu ...

3 days ago
Latest News

Lebanon's PM Hariri says he will be in B ...

3 days ago
Latest News

Zimbabweans say Mugabe must quit now, bu ...

3 days ago

AC/DC founding member Malcolm Young dead ...

3 days ago
Most Popular

Indonesia ready for ‘big bang’

By The Associated Press

Fed: Too early to gauge impact

By The Associated Press

UK increases heat on Google

By The Associated Press

Swiss claim 1MDB fraud

By The Associated Press

Fed: No need to lower rates

By Administrador