A federal judge granted the Federal Deposit Insurance Corp. permission to revive lawsuits against Citigroup Inc., Bank of New York Mellon Corp. and U.S. Bancorp that he had dismissed last September, to recoup more than $695 million of losses on soured mortgage debt that a failed Texas bank once owned, Reuters reported. In a decision made public yesterday, U.S. District Judge Andrew Carter in Manhattan said that the FDIC could try to show it still had legal standing to sue as the receiver for Austin-based Guaranty Bank, despite having transferred its claims to a "resecuritization trust" when it sold the debt in March 2010. The FDIC had accused the three banks in its lawsuits of failing, as bond trustees, to monitor the underwriting and servicing of mortgages backing $2.7 billion of securities that Guaranty bought. The FDIC has estimated that Guaranty's failure in August 2009 could cost its deposit insurance fund $3 billion.
