On November 24, 2015, a group of investors, led by Pacific Investment Management Co. (“PIMCO”), filed suit in the Supreme Court of the State of New York against Citibank, N.A., as trustee of 25 private-label RMBS Trusts. This state court complaint follows the Southern District of New York’s dismissal of a similar action for lack of jurisdiction over claims relating to the majority of trusts, as discussed here. The investors allege that Citibank knew the trusts contained loans that breached seller representations and warranties, and that Citibank failed to perform its contractual obligations to require the sellers to cure or repurchase the defective loans. Plaintiffs further allege that Citibank breached its duties to enforce the obligations of loan servicers by failing to redress alleged servicer misconduct. The complaint also alleges breaches of Citibank’s fiduciary duties and a violation of New York’s Streit Act.
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Investors File Putative Class Action Against Citibank for Allegedly Failing to Comply with RMBS Trustee Duties
Financial Industry Review
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