Bank of America and US Bancorp must face some claims in a lawsuit brought by a pension fund that contends the banks failed in their responsibilities to protect mortgage-bond investors.
Manhattan federal court judge Katherine Forrest ruled yesterday that the Policemen’s Annuity and Benefit Fund of the City of Chicago can pursue some of the allegations made in its suit while she dismissed other claims against the banks.
The pension fund sued the banks over their role as trustees for pools of mortgage loans bundled into securities and sold to investors, arguing they caused investors to incur millions of dollars in losses.
The banks disregarded their job of ensuring there were no missing or defective documents for the mortgages, and that defective loans were removed from the mortgage pools, the pension fund said in its complaint.
BofA declined to comment. USB said it had no liabilities in the case.