The German bank was accused by the Federal Housing Finance Agency,
which oversees Freddie Mac, of misrepresenting the underwriting and
quality of home loans backing the securities in the trust, which
dated from 2006.
Freddie Mac bought nearly one-third of the securities, which lost
much of their value amid the U.S. housing and financial crises.
The lawsuit is barred by New York state's six-year statute of
limitations, Justice Eileen Bransten ruled in a filing Wednesday in
State Supreme Court in Manhattan.
The dismissal came after a New York appeals court ruling in December
that the clock on the statute of limitations began to run when the
transaction was executed in 2006.
FHFA began the lawsuit in 2012, just within the six years, but the
agency did not have standing to sue.
HSBC Bank USA, National Association, the trustee overseeing the
securities, was the party allowed to bring the claims, but it did
not join the case until January 2013, which was too late, the judge
A spokesman for the trustee had no immediate comment. Nor did an
FHFA spokeswoman. A Deutsche Bank representative declined to
New York's Appellate Division, First Department, ruled in December
that the clock starts on the closing date of the mortgage loan
purchase agreements, not when a bank refuses to cure or repurchase
faulty loans. Its ruling came in a case Ace Securities Corp brought
against Deutsche Bank.
[to top of second column]
In the Ace case, the bondholders also later substituted the trustee
as plaintiff, but that did not make the complaint timely, the
appeals court said.
In a separate decision filed on Wednesday, Justice Bransten allowed
another case brought by HSBC, as trustee of a $702 million Ace
Securities Corp Home Equity Loan Trust, to go forward, denying some
elements of Deutsche's motion to dismiss.
Deutsche Bank in December agreed to pay $1.9 billion to settle
claims that it misled Fannie Mae and Freddie Mac, America's biggest
providers of housing finance, into buying $14.2 billion in
The case is Federal Housing Finance Agency v DB Structured Products,
New York State Supreme Court, New York County, No. 652978/2012.
(Editing by Jonathan Oatis)
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