Federal Insurance Company v. Metropolitan Transportation Authority et al

Filing 67

ORDER: Accordingly, Plaintiff is directed to advise the Court of the status of its claims against Current-Defendant Lanmark Group, Inc. no later than March 20, 2020, or the Court will deem Plaintiff to have abandoned this action, and it will direct the Clerk of Court to close the case. (As further set forth in this Order.) (Signed by Judge John F. Keenan on 2/20/2020) (cf)

Case 1:09-md-02013-PAC Document 57

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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FEDERAL INSURANCE COMPANY,
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Plaintiff,
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In re FANNIE MAE 2008 SECURITIES
:
-againstLITIGATION
:
:
LANMARK GROUP, INC.,
:
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Defendant.

Filed 09/30/10 Page 1 of 45
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: 02/20/2020

No. Civ. 7831 (PAC)
08 17 Civ. 3425 (JFK)
ORDER
09 MD 2013 (PAC)

OPINION & ORDER

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JOHN F. KEENAN, United States District Judge:
HONORABLE PAUL A. CROTTY, United States District Judge:
On October 15, 2019, the United States Court of Appeals for

BACKGROUND1
the Second Circuit affirmed the Court's November 14, 2018
The early years of this decade saw a boom in request for declaratory and
judgment, which denied Plaintiff's home financing which was fueled, among
other things, by low interest rates and lax credit conditions. New lending instruments, such as
injunctive relief and granted the motion of Former-Defendants
subprime mortgages (high credit risk loans) and Alt-A mortgages (low-documentation loans)
the Metropolitan Transportation Authority and the New York City
Transit Authority to played a role too; they took sole claim risks on the
kept the boom going. Borrowers dismiss Plaintiff's on unmanageable against
them.
assumption that the market would continue to rise and that refinancing options would always be

available Accordingly, Plaintiff was lacking in the to advise theoriginatorsof
in the future. Lending discipline is directed system. Mortgage Court did
the these high-risk mortgage loans. Rather than carry the rising risk on Lanmark
not holdstatus of its claims against Current-Defendant their books, the
Group, Inc. no later than March 20, market, or as Court packages
originators sold their loans into the secondary mortgage2020, oftenthesecuritized will deem
Plaintiff to have abandoned this action, and almost exponentially.
known as mortgage-backed securities (“MBSs”). MBS markets grewit will direct the
Clerk of Court to close burst. In 2006, the demand for housing dropped abruptly
But then the housing bubble the case.
SO ORDERED.
and home prices began to fall. In light of the changing housing market, banks modified their
Dated:
New York, New York (
lending practices and became unwilling to refinance home mortgages without refinancing.
John: Keenan
February 20, 2020
United States District Judge
1

Unless otherwise indicated, all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,
dated June 22, 2009. For purposes of this Motion, all allegations in the Amended Complaint are taken as true.

1