RBS faces mortgage debt lawsuit

RBS building

Royal Bank of Scotland must face a U.S. lawsuit seeking to force it to cover losses suffered by a bond insurer on a $1.15bn securities offering backed by allegedly defective and fraudulent home loans.

Reuters reports that U.S. District Judge John Koeltl in Manhattan said RBS must defend itself against claims by Assured Guaranty that the taxpayer-owned bank committed fraud, and aided and abetted fraud, by inducing it to insure part of a 2007 securitization, and expose it to more than $100m of potential losses.

The allegations 'raise a strong inference that RBS had a specific motive and intent to deceive the plaintiff in order to obtain the policy for a specific transaction', Koeltl said.

Koeltl issued his ruling orally at a March 17th hearing, for which Reuters obtained a transcript that has not been posted to the court's public website.

Hit the link below to access the complete Reuters article:

Royal Bank of Scotland must face lawsuit over mortgage debt

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