An April 2 ruling on RMBS loans in breach of representations and warranties given by a bank is credit positive for investors of both residential and commercial mortgage backed securities, according to Moody’s Investors Service

A New York intermediate appellate court ruled that a residential mortgage-backed securities loan “need not be in default to trigger [a bank’s] obligation to repurchase it” from the trust if the loan breached rep and warranties given by the bank.

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