Siding with a Deutsche Bank unit and its lawyers at Simpson Thacher & Bartlett, New York’s highest court on Thursday imposed strict time limits for investors to bring so-called put-back lawsuits against banks that packaged and sold mortgage-backed securities.
The investors and a trustee bank accused Deutsche Bank’s DB Structured Products Inc. of breaching warranties related to a residental mortgage-backed security that DB sold in 2006 by failing to repurchase, or “put back,” allegedly shoddy mortgage loans included in the securitization. Investors claimed that they lost nearly $330 million. The New York Court of Appeals concluded that the plaintiffs’ claims were time-barred because the six-year statute of limitations started running when DB sold the security.
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