Judge holds the key in massive FHFA litigation
Is there any hope for a quick end to the massive litigation brought by the FHFA, the overseer of the big housing GSEs, against big banks over mortgage misrepresentation issues?
If so, the best chance may rest with U.S. District Judge Denise Cote, 66, who was appointed to the federal bench in 1994 and "is best-known for presiding over the WorldCom securities fraud case nearly a decade ago. She is known as a no-nonsense judge who stresses efficiency in large, complex cases," according to Reuters.
The bulk of the FHFA cases remain before her, and she has made clear that she wants a settlement. But that hasn't happened so far, and it might never happen.
That said, there's plenty of time before the first trial gets underway. It's scheduled for next January.
All in all, it does not look as though the banks will be successful in getting these cases dismissed, according to the piece: "Cote's rulings at times have frustrated the banks, such as orders limiting discovery by the defendants into only the side of Fannie Mae's and Freddie Mac's businesses that purchased the securities. Also, in December, the judge ruled that the FHFA could attempt to prove its case about whether the mortgages in question conformed to proper lending standards by using just a sample of the underlying loans in the securities, rather than having to review each of the 1.1 million total loans in the lawsuits."
The banks have already appealed one of the judge's most important decisions to the appellate level; that decision allowed a suit against UBS to proceed. "The UBS lawsuit is a test case, and the future of all the lawsuits could rest on the appeals court's ultimate decision," said the article.
- here's the article