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NY District Court Judge expands class of plaintiffs in RBS MBS securities case

NY District Court Judge expands class of plaintiffs in RBS MBS securities case

As banks exposed to mortgage-backed securities litigation try to fight these claims with their sights set on ending long-term exposure, one judge in New York recently gave plaintiffs fighting the Royal Bank of Scotland (RBS) and other parties over mortgage misrepresentations a green light to expand their class of MBS plaintiffs.

Judge Harold Baer of the U.S. Southern District of New York recently filed two opinions in which he accepts the expansion of a class of plaintiffs suing RBS and various parties over the issuance of toxic mortgage-backed securities. At the same time, the judge rejected another claim to expand a plaintiffs’ class currently fighting over another trust that contained securitized mortgages.

The first class of plaintiffs filed a class action lawsuit on behalf of those who acquired interests in theHarborview Mortgage Loan Trusts pursuant to registration statements and prospectus filed back in 2006. Another suit revolved around a class of plaintiffs who acquired interests in the so-called RALI Trusts – or Trusts backed by mortgages later deemed toxic – based on registration statements and prospectuses filed by the Securities and Exchange Commission and Residential Accredited Loans – a subsidiary of Residential Capital.

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