NEW YORK (Reuters) – A New York appeals court on Thursday revived Assured Guaranty Corp's claims for certain damages in its lawsuit against Credit Suisse Group AG over allegedly defective loans underlying mortgage-backed securities.
Assured, which guaranteed the loans, sued Credit Suisse in 2011 claiming the bank misrepresented the quality of loans, and that a “massive number” of bad mortgages were packaged into the securities.
The lawsuit is among numerous cases brought after the housing collapse seeking to hold banks accountable for losses incurred by insurers who guaranteed securities during the financial crisis. Many of the cases have been settled.
In a unanimous opinion in the Assured case, the Appellate Division, First Department, ruled a lower court wrongly held that the only remedy available to the insurer was to cure the defect or repurchase the loan. Their contract said otherwise, the appeals court found.
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