Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

CU System
ResCap Seeks Denial Of NCUA Claim On Corporate Losses
NEW YORK (6/26/13)--Attorneys for Residential Capital have asked a federal bankruptcy court in New York to deny more than $200 million in claims filed by the National Credit Union Administration related to losses from residential mortgage backed securities (RMBS) sold to Western Corporate FCU and U.S. Central FCU.

ResCap filed its objection to NCUA's claims with the court on June 20, seeking to "disallow and expunge the claims filed" by NCUA on behalf of the two corporates, which NCUA liquidated on March 20, 2009.  NCUA had brought the claims as the corporates' liquidating agent.

NCUA filed 11 proofs of claim for about $200 million, according to the court document .Roughly 6,839 proofs of claim have been filed against the company in its Chapter 11 bankruptcy cases.

In suits filed in Kansas and California, NCUA argued that RMBS issuers and underwriters, including Residential Accredits Loans and Residential Funding Mortgage Securities II, abandoned underwriting standards and made misstatements in the funds' offering materials about the safety of the investments.

"The NCUA claims are untimely; the NCUA cannot allege--let alone prove--any material misstatement in the offering materials; and the credit unions' losses were caused by a market-wide collapse, not by any misstatement by the debtors," said ResCap's objection document.

ResCap argued that NCUA's claims don't meet the statute of limitations for filing a claim, that its complaints "contain no particularized factual allegations linking the NCUA's generalized theory about abandonment of underwriting standards to the specific RMBS securities the credit unions purchased, and said the corporates' losses were not caused by the revelation of any alleged misstatement."

It urged the court to "reject the NCUA's belated attempt to recover from the debtors (at the expense of the debtors' other creditors) for losses that highly sophisticated RMBS investors suffered when their ill-timed and risky bets went wrong."

NCUA has until July 12 to respond. A hearing date is set for July 24.


RSS





print
News Now LiveWire
CUNA: CUNA offices closed through Friday, News Now returns Monday http://t.co/a5xbLzQKDj
1 Day ago
Reminder: @CUNA's Madison, D.C. offices will be closed through Friday, open again on Monday. #NewsNow will publish Monday.
16 hours ago
MI dentist to match @CUDirect's $20K to @HurleyMedical as a result of #20for20 online voting http://t.co/hqmIc9LpK1 @CMNHospitals
17 hours ago
New #creditunion chartered in St. Louis - #LutheranFCU - by @TheNCUA http://t.co/faPfANGS0P. Only 3rd new FCU charter this year.
17 hours ago
Don't get hacked during the holidays-use these tips from @CUNA http://t.co/jEqxni6NhO #StoptheDataBreaches http://t.co/woIxPOIyys
18 hours ago