Greenpoint’s Motion to Dismiss Loan Misrepresentation Suit Granted in Part

On October 15, Judge Donovan Frank of the U.S. District Court for the District of Minnesota, granted in part and denied in part Greenpoint Mortgage Funding’s motion to dismiss a lawsuit filed by Residential Funding Co., an affiliate of Residential Capital.  Residential Funding alleged that Greenpoint breached representations and warranties in connection with $88 million in mortgage loans it sold to Residential Funding and that Residential Funding securitized.  Following a bankruptcy court’s 2013 approval of a global settlement of Residential Funding’s RMBS-related liabilities, Residential Funding sued Greenpoint seeking indemnification and damages for breach of contract.  Judge Frank dismissed the breach of contract claim as time barred under Minnesota’s six-year statute of limitations because the alleged breaches at issue occurred when the loans were acquired, which was more than six years before Residential Funding filed suit.  Judge Frank did not dismiss the indemnification claim, which Greenpoint argued was not properly assigned to Residential Funding, because whether Residential Funding was the proper plaintiff was a factual question that could not be resolved on the pleadings.  Order.