Home New loan Wells Fargo mainly defeats two mortgage loss lawsuits

Wells Fargo mainly defeats two mortgage loss lawsuits


NEW YORK, July 12 (Reuters) – Wells Fargo & Co on Tuesday won the dismissal of a lawsuit and a large part of the second accusing the fourth bank of failing to monitor toxic mortgage-backed securities which were one of the main causes of the 2008 global crisis. financial crisis.

In a 68-page ruling, U.S. District Judge Katherine Polk Failla in Manhattan dismissed a lawsuit filed by investors led by Irish-led Phoenix Light SF Ltd, saying the legal issues they raised had been resolved. in a prior dispute.

The judge also said Commerzbank AG (CBKG.DE) was barred from pursuing numerous claims against San Francisco-based Wells Fargo because the German lender lacked standing or filed suit too late. .

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Commerzbank was allowed to take legal action over Wells Fargo’s alleged inaction after it learned that managers of 17 trusts had liquidated 3,377 loans with faulty documentation instead of having them redeemed by sellers. Some other claims have also survived.

Lawyers for the plaintiffs did not immediately respond to requests for comment. Wells Fargo did not immediately respond to similar requests.

The lawsuits sought hundreds of millions of dollars in damages for Wells Fargo’s role as loan trustee.

They are part of a series of lawsuits over the past decade and a half aimed at holding lenders and trustees accountable for the plummeting value of residential mortgage-backed securities once considered safe.

Litigation against trustees typically accused them of failing to require sellers to repurchase degraded loans, notify investors of defaults, and use proper standards of care.

Wells Fargo previously settled two investor class action lawsuits and a lawsuit filed by the National Credit Union Administration over faulty mortgages.

In August 2018, he agreed to pay a $2.09 billion civil penalty to settle allegations by the US Department of Justice that he knowingly made and sold residential mortgages that contained misinformation about income and inferior in quality to what it had represented.

The cases are Phoenix Light SF Ltd et al v Wells Fargo Bank NA, US District Court, Southern District of New York, No. 14-10102; and Commerzbank AG v Wells Fargo Bank NA in the same court, No. 15-10033.

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Reporting by Jonathan Stempel in New York Editing by Matthew Lewis

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