Morgan Stanley Stuck With Suits Over $600M In Toxic Loans
By Stewart Bishop (August 13, 2014, 6:51 PM EDT) -- A New York judge refused to toss lawsuits brought by securitization trusts against a Morgan Stanley unit over $600 million worth of purportedly toxic mortgage loans used for residential mortgage-backed securities, finding Tuesday that the breach of contract allegations were sufficient.
Morgan Stanley Mortgage Capital Holdings LLC had argued that trustee U.S. Bank NA had failed to give proper detailed notice of the poor-performing loans, which would have triggered Morgan Stanley's contractual obligation to repurchase or cure them.
But New York Supreme Court Judge Eileen Bransten said that as other courts dealing with RMBS cases have held, it's enough for the...
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