U.S. Bank Suit to Recover Mortgage-Backed Security Losses Fails

U.S. Bank N.A.‘s attempt to recoup more than $1.1 billion lost in the mortgage-lending crisis is untimely, the Second Circuit ruled Feb. 6.

The dispute surrounds three aggregated pools of residential home mortgages, according to the court. GreenPoint Mortgage Funding Inc. sold them to Lehman Brothers Holding Inc. and Lehman Brothers Bank FSB in 2006, with accompanying representations and warranties about their soundness. Their aggregate principal balance then was about $3.4 billion.

The loans went into three trusts, which then issued securities backed by the mortgages. U.S. Bank was the trustee, and it ultimately sought $1.1 billion plus other ...