sustained two claims for breach of contract

S.D.N.Y. Trims Assured’s Claims Against Flagstar

On July 7, 2011, Southern District of New York Federal Judge Jed Rakoff partially granted Flagstar Bank’s (“Flagstar”) motion to dismiss claims brought by Assured Guaranty (“Assured”). The Court sustained two claims for breach of contract, but limited Assured’s remedy to Flagstar’s “cure or repurchase” obligations and dismissed two additional claims for reimbursement and indemnification. Assured had alleged that Flagstar misled it about the characteristics of the loans, mortgagors, and the underlying properties and that, when Assured did its own investigation, it found that the majority of the sampled loans violated Flagstar’s underwriting guidelines. The court issued the ruling without a full opinion, which will be issued later. Order