New Second Circuit Statute of Limitations Ruling A Benefit to Loan Originators, Brokers

As originators and brokers of mortgage loans continue to get served with new lawsuits (or threatened with potential suits) related to loans that they conveyed to aggregators prior to the financial crisis of 2008, questions almost inevitably arise as to how this is even possible: aren’t such claims time-barred under the applicable statute of limitations? The answer is more complicated than the originator or broker might have initially thought. It can depend on what state’s law applies under the pertinent contract, for example. For many judges, it can also depend on whether the aggregator plaintiff characterizes its claim as one for “indemnification,” rather than “breach of contract” or “repurchase.” Our firm has had numerous successes in helping clients defeat claims by aggregators, including on statute of limitations grounds. But we have also encountered many situations in which judges conclude that a plaintiff’s claim…

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