A series of lawsuits that charge some of the nation's biggest banks with misleading investors in connection with the sale of hundreds of billions of dollars of MBS may come down to a question of timing.

The U.S. Court of Appeals for the 2nd Circuit on Monday was slated to hear arguments in an appeal brought by UBS in its legal dispute with the Federal Housing Finance Agency (FHFA). It claims that the FHFA waited too long to file suits that charged UBS and other underwriters with misconduct in the sale of securities backed by residential mortgage loans that Fannie Mae and Freddie Mac purchased over a roughly two-year period beginning in 2005.

The FHFA sued UBS in July 2011 as part of its role as conservator for Fannie and Freddie. The agency alleges that UBS and other defendants falsely asserted that the underlying mortgages complied with certain underwriting guidelines and standards. The suit against UBS concerns $6.4 billion in MBS purchased by Fannie and Freddie in 23 securitizations by the bank.

UBS received permission in June from U.S. District Judge Denise Cote of the Southern District of New York in May to seek an interim ruling before the 2nd Circuit on the timing question while the litigation before her proceeds. On appeal, UBS charges that federal securities laws gave the FHFA three years following the sale of the securities at issue to bring its action. According to UBS, the Housing Economic and Recovery Act, which established the FHFA in 2008 and gave the agency three years to file claims, did not supersede the so-called statute of repose set forth in the securities laws.

"Almost 80 years ago, Congress created an unambiguous mandate in Section 13 of the Securities Act that 'in no event shall any action' be brought under the Securities Act after three years from a specified act of the defendant," UBS wrote in a brief to the appeals court on Nov. 8. "And while FHFA and the [Department of Justice] attempt to justify re-writing the extender statute by relying on a singular policy of providing FHFA more time to recover alleged losses, this ignores the strong public policy behind the statutes of repose…which are intended to set finite, certain limits on defendants' exposure under a strict liability regime."

For its part, the FHFA says Congress intended to give the agency three years from the agency's establishment to bring to file the suits notwithstanding the securities law to which UBS points. "Courts — including the Supreme Court and this court — regularly use the term 'statute of limitations' to describe periods of repose, including specifically the three-year repose period set forth in Section 13 of the Securities Act," the FHFA wrote in a brief filed Oct. 25.

FHFA's suit against UBS is one of 16 actions against mortgage underwriters pending before Cote. Though the appeal focuses on distinctions between statutes of limitation and statutes of repose, legislative intent and other legal fine points, the 2nd Circuit's ruling has the potential to determine whether any of the cases can proceed.

In September, Cote rejected a request by UBS to suspend the litigation pending its appeal. "The UBS Matter is the linchpin in the coordinated work in which all parties are engaged in this complex litigation," Cote ruled on Sept. 4.

Depositions in the UBS case are expected to begin in January with a trial slated for January 2014. Two of the other trials are scheduled for the summer of 2014, with remaining cases set for trial the following January.

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