Banks In MBS Row Want Loss Causation Defense Heard In Va.

Law360, Los Angeles (November 4, 2013, 7:05 PM EST) -- Banks battling the Federal Housing Finance Agency over toxic mortgage-backed securities sold to Fannie Mae and Freddie Mac asked a New York federal court Monday that Virginia state judges adjudicate whether laws in that state allow the banks' loss causation defense.

The banks claimed that a New York judge should certify the loss causation issue to the Virginia Supreme Court, as Virginia is where Freddie Mac is based and where some of the securities at issue were registered.

The FHFA, in a September motion for partial...
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