UBS Tries Again to Block FHFA Lawsuit

After losing a previous bid earlier this year, ""UBS"":http://www.ubs.com/us/en.html is making another attempt to shut down a lawsuit from the ""Federal Housing Finance Agency"":http://www.fhfa.gov/ (FHFA), ""Bloomberg"":http://www.bloomberg.com/news/2012-11-26/ubs-leads-wall-street-bid-to-halt-fhfa-mortgage-bond-suit.html reports.

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The bank is one of a number of defendants facing suits from the FHFA over the sales of mortgage-backed securities (MBS) to ""Fannie Mae"":http://www.fanniemae.com/portal/index.html and ""Freddie Mac"":http://www.freddiemac.com/. The securities cost the GSEs billions of dollars when they collapsed during the housing crash. The FHFA alleges the banks that sold the securities misrepresented the underwriting and stability of the loans they contained.

In its argument to dismiss, UBS says the FHFA took too long to act on its claims, which expired in 2010. U.S. The agency first brought claims against UBS in 2011.

District Judge Denise Cote ruled against UBS' motion to dismiss in May, saying the law that established the FHFA gives it three years from the start of its conservatorship to pursue losses over the allegedly misrepresented securities. Since that time, Cote has rejected motions to dismiss from several other banks under fire from the FHFA, including ""JPMorgan Chase"":https://themreport.com/articles/jpmorgan-chase-fails-in-bid-to-dismiss-fhfa-suit-2012-11-06, ""Goldman Sachs, Deutsche Bank"":https://themreport.com/articles/fhfa-suits-against-deutsche-bank-goldman-sachs-to-go-on-2012-11-13, and Bank of America's ""Merrill Lynch"":https://themreport.com/articles/judge-refuses-to-dismiss-fhfa-suit-against-merrill-lynch-2012-11-09 unit.

While UBS may have lost that battle, it hasn't bowed out of the war yet. The bank argued before the U.S. Court of Appeals in Manhattan on Monday, once again stressing that the lawsuit may open itself and other banks up to claims that have otherwise expired.

In a brief filed with the appeals court, UBS calls the FHFA's suit ""a belated attempt by the two largest and most sophisticated issuers and purchasers of MBS in the world to shift blame for losses they suffered as a result of the nationwide housing crisis in which they played a critical role.""

In its response, the FHFA argued that placing an expiration date on the agency's claims would limit its ability to pursue losses brought on the GSEs and taxpayers.