Credit Suisse, Assured Guaranty settle U.S. mortgage lawsuit
Nov 26 (Reuters) - Credit Suisse Group AG has reached a confidential settlement with Assured Guaranty Ltd on claims related to what the insurer said were defective loans underlying mortgage-backed securities, court documents showed.
Assured Guaranty said it had filed to dismiss its lawsuit against Credit Suisse, according to a statement on its website.
U.S. Bank National Association, which acts as a trustee for the six residential mortgage-backed securities that were at issue, filed a motion with the New York Supreme Court objecting to the confidential settlement.
The U.S. Bank National Association filed a motion on Nov. 20 seeking to intervene as a plaintiff in the lawsuit.
The parties to the lawsuit deemed that the motion to intervene was moot once a settlement had been reached and said they would not be submitting any responses to the motion.
However, the U.S. Bank National Association said the action can only be discontinued by court order.
Assured, which had guaranteed the loans, sued Credit Suisse in 2011 alleging that the bank had misstated the quality of loans, and that a "massive number" of bad mortgages were packaged into the securities.
The lawsuit is among numerous cases brought after the U.S. housing slump seeking to hold banks accountable for losses incurred by insurers who guaranteed securities during the financial crisis.
Credit Suisse also faces similar charges from MBIA Inc regarding the manner in which it processed loans used in mortgage-backed securities.
The case is Assured Guaranty Municipal Corp v DLJ Mortgage Capital Inc, New York state Supreme Court, New York County, No. 652837/2011. (Reporting by Narottam Medhora in Bangalore; Editing by Richard Chang)
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