Courts Limit Exposure for Breach of Warranties

, New York Law Journal

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Eduardo J. Glas of McCarter & English writes: Several recent New York cases involving securitized-mortgage trusts have dealt setbacks to the trusts seeking to enforce contractual rights against the sellers of the mortgages for breach of warranties. Almost unanimously, the courts have been holding that such suits by the trusts are barred by the applicable six-year statute of limitations on breach of contract actions despite contractual language that purports to establish the accrual of the claims not at the time the warranties are made but at a later period.

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