A unit of Deutsche Bank AG, Europe’s biggest bank by assets, was sued in New York state court for breach of contract by a trustee for a pool of mortgage loans.
The trustee, HSBC Bank USA NA, sued yesterday in New York State Supreme Court in Manhattan saying DB Structured Products Inc. failed to “cure, substitute or repurchase” mortgages and that the trust didn’t satisfy representations and warranties about their origin and characteristics.
DB Structured securitized the loans and sold them to the trust and chose more than 5,000 loans that are the primary source of revenue for payments on the certificates issued by the trust, according to the complaint. At least 2,375 of the loans breached the representations and warranties, the trustee said.
“Even after receiving exhaustively detailed descriptions of each of the breaches from the trustee,” DB Structured Products “has failed to cure a single breach or repurchase a single loan,” the trustee said in the complaint. “Left with no other option, the trustee now brings this action.”
Duncan King, a spokesman for Frankfurt-based Deutsche Bank, declined by e-mail to comment immediately on the lawsuit.
The case is Ace Securities Corp. v. DB Structured Products Inc., 650327/2013, New York State Supreme Court, New York County (Manhattan).