2nd Circ. Remands ResCap Appeal Of FHFA's MBS Suit

Law360, New York (July 15, 2013, 5:41 PM EDT) -- The Second Circuit on Monday remanded to district court an appeal by bankrupt mortgage lender Residential Capital LLC of a ruling that allowed the Federal Housing Finance Agency to sue ResCap’s affiliates over mortgage-backed securities, ruling that further determination is needed as to whether an automatic stay may apply.

In a summary order, a three-judge panel for the appeals court found that since the Bankruptcy Code’s automatic stay provision may apply to nondebtors in some limited circumstances, the district court needs to supplement the record and...
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