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(Reuters) — A federal judge granted the FDIC permission to revive lawsuits against Citigroup Inc., Bank of New York Mellon Corp. and U.S. Bancorp that he had dismissed last September to recoup more than $695 million of losses on soured mortgage debt that a failed Texas bank once owned.
In a decision made public on Tuesday, U.S. District Judge Andrew Carter in Manhattan said the FDIC could try to show it still had legal standing to sue as the receiver for Austin, Texas-based Guaranty Bank, despite having transferred its claims to a "resecuritization trust" when it sold the debt in March 2010.
The FDIC, whose full name is Federal Deposit Insurance Corp., had accused the three banks in its lawsuits of failing, as bond trustees, to monitor the underwriting and servicing of mortgages backing $2.7 billion of securities that Guaranty bought.
The FDIC has estimated that Guaranty's failure in August 2009 could cost its deposit insurance fund $3 billion.
Judge Carter's decision, dated on Monday, said the FDIC could invoke a federal rule allowing the resecuritization trust, which the regulator said does have standing, to ratify its claims.
"Defendants do not contest that ratification is an option for plaintiff under the resecuritization agreements," Judge Carter wrote. He gave the FDIC 90 days to file an amended complaint.
An FDIC spokesman declined to comment.
According to the lawsuits, the securities were issued from 2005 to 2007. Some were sponsored by the EMC unit of Bear Stearns Cos. and the others by a unit of Countrywide Financial Corp.
The cases in the U.S. District Court, Southern District of New York, are FDIC v. The Bank of New York Mellon, No. 15-06560; FDIC v. U.S. Bank NA, No. 15-06570; and FDIC v. Citibank NA, No. 15-06574.
(Reuters) — A federal appeals court on Friday rejected a bid to revive a $54.8 million jury verdict against Wells Fargo & Co, saying the trial judge had authority to take the “drastic step” of decertifying the class action after the award was made.