The 2007–2008 economic crisis, spurred in part by widescale defaults on subprime mortgage loans, led investors, monoline insurers, and others with interests in residential mortgage-backed securities to sue various parties to the securitizations, including the original lenders behind the loans and the sponsors of the securities, to recover portions of their losses on nonperforming securitized loans. The investors and insurers have alleged that the lenders and sponsors breached contractual representations and warranties they made concerning the underwriting characteristics and quality of the securitized loans. Some of these claims are still being litigated, and a few new lawsuits are still being ﬁled, notwithstanding that the relevant statutes of limitations on such claims have now expired, for the most part. In its landmark decision in ACE Securities Corp. v. DB Structured Products, Inc., the New York Court of Appeals held that, under New York law, which applies to most RMBSs, claims generally accrue at the time when lenders and sponsors give the representations and warranties. In practice, this places the accrual date for the claims at the time of securitization at the latest, usually a few months after loan origination.
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