A ruling last week regarding the purchase of $440,000 of non-agency MBS in late 2007 and mid 2008 appears to have significantly expanded liability for non-agency MBS issuers. The ruling expands liability beyond trusts specifically purchased by investors to potentially all trusts in an issuer’s shelf with mortgages originated by the same lenders. The decision by the U.S. Court of Appeals for the Second Circuit on NECA-IBEW Health & Welfare Fund v. Goldman Sachs overturned a 2010 ruling by the district court which had dismissed the case. “The Second Circuit’s decision in this case not only represents...