Assured Guaranty Ltd can move forward with part of a lawsuit accusing UBS AG of falsely representing the quality of the loans underlying $1.49 billion of mortgage-backed securities it insured, a federal judge has ruled.
The lawsuit is one of several filed since the financial crisis hit monoline insurers over losses they sustained insuring mortgage-backed securities when the housing market tumbled. Other monolines with similar lawsuits against banks include MBIA Inc and Ambac Financial Group Inc.
U.S. District Court Judge Harold Baer, in Manhattan, on Wednesday kept Assured's claims alive, though he dismissed a portion of the case.
Baer allowed Assured to press ahead with claims that UBS breached contracts underlying the securities by misleading the insurer about the quality of the mortgages.
He dismissed a claim that accused UBS of breaching obligations to repurchase defective mortgage loans. Baer said only the trustee for the trusts underlying the mortgage-backed securities
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