WASHINGTON—The U.S. Court of Appeals for the Ninth Circuit has reversed a lower court decision that stated the National Credit Union Administration had been late in filing a lawsuit against two banks over mortgage-backed securities they had sold.
According to the Appeals Court opinion, the Extender Statute of the Financial Institution Reform, Recovery and Enforcement Act of 1989 supplants the requirement that a lawsuit be brought with three years after the security was offered or sold under the Securities Act. The news was first reported by Keith Leggett, the former senior vice president and senior economist at the ABA, on his Credit Union Watch blog..
With the new ruling in hand, NCUA is now able to continue its lawsuit against Wachovia Trust and Nomura Home Equity over making false and misleading statements in their offerings of residential mortgage-backed securities purchased by the failed WesCorp.