Law360, New York (September 8, 2015, 7:43 PM EDT) -- A New York federal judge on Tuesday dismissed a large portion of claims from a derivative class action accusing Citibank NA of mishandling mortgage-backed securities in more than $17 billion worth of pooled loans, finding the majority of the loans are not covered by federal law.U.S. District Judge Jesse M. Furman partially granted Citibank’s motion to dismiss claims it failed to perform its duties as the trustee for 27 trusts by ignoring deficiencies in the loans. He declined to exercise supplemental jurisdiction over claims related to the New York common law trusts governed by pooling and servicing agreements, or PSAs,... In the legal profession, information is the key to success. You have to know what’s happening with clients, competitors, practice areas, and industries. Law360 provides the intelligence you need to remain an expert and beat the competition. TRY LAW360 FREE FOR SEVEN DAYS
Citibank has had a large number of mortgage-backed securities claims against it dismissed by a New York judge, who found a majority of the loans were not covered by federal law. Citibank is accused of mishandling mortgage-backed securities in over $17bn worth of pooled loans. The lawsuit was filed on behalf of investors and mortgage holders from across the country that bought mortgages with money borrowed through Citi Mortgage. M. Furman refused to completely dismiss the suit, rejecting Citibank's argument that the shareholders were unable to prove that the bank actually knew that any of the loan sellers had misrepresented the loans.