| NEW YORK, April 10
NEW YORK, April 10 Deutsche Bank AG
has won dismissal of a lawsuit seeking to have it cover
government-sponsored Freddie Mac's losses on
defective mortgage securities purchased from a more than $1.4
The German bank was accused by the Federal Housing Finance
Agency, which oversees Freddie Mac, of misrepresenting the
underwriting and quality of home loans backing the securities in
the trust, which dated from 2006.
Freddie Mac bought nearly one-third of the securities, which
lost much of their value amid the U.S. housing and financial
The lawsuit is barred by New York state's six-year statute
of limitations, Justice Eileen Bransten ruled in a filing
Wednesday in State Supreme Court in Manhattan.
The dismissal came after a New York appeals court ruling in
December that the clock on the statute of limitations began to
run when the transaction was executed in 2006.
FHFA began the lawsuit in 2012, just within the six years,
but the agency did not have standing to sue.
HSBC Bank USA, National Association, the trustee overseeing
the securities, was the party allowed to bring the claims, but
it did not join the case until January 2013, which was too late,
the judge said.
A spokesman for the trustee had no immediate comment. Nor
did an FHFA spokeswoman. A Deutsche Bank representative declined
New York's Appellate Division, First Department, ruled in
December that the clock starts on the closing date of the
mortgage loan purchase agreements, not when a bank refuses to
cure or repurchase faulty loans. Its ruling came in a case Ace
Securities Corp brought against Deutsche Bank.
In the Ace case, the bondholders also later substituted the
trustee as plaintiff, but that did not make the complaint
timely, the appeals court said.
In a separate decision filed on Wednesday, Justice Bransten
allowed another case brought by HSBC, as trustee of a $702
million Ace Securities Corp Home Equity Loan Trust, to go
forward, denying some elements of Deutsche's motion to dismiss.
Deutsche Bank in December agreed to pay $1.9 billion to
settle claims that it misled Fannie Mae and Freddie
Mac, America's biggest providers of housing finance, into buying
$14.2 billion in mortgage-backed securities.
The case is Federal Housing Finance Agency v DB Structured
Products, New York State Supreme Court, New York County, No.
(Editing by Jonathan Oatis)