Federal Judge Robert Sweet dismissed claims by Deutsche Bank and (the mortgage unit of) France's BNP Paribas over BofA's alleged breach of obligations on more than $1.7 billion of mortgage-related transactions.  The Judge, however, gave BNP Paribas and Deutsche Bank 30 days to file fresh complaints.

The decision came just months after Sweet had allowed both the plaintiffs to proceed with their lawsuits against the BofA related to losses they incurred in connection with the collapse of mortgage lender Taylor Bean & Whittaker Mortgage Corp. 

Bank of America was connected to this case because it was a trustee for notes issued by Taylor Bean's Ocala Funding LLC unit.  Ocala used proceeds from note sales to Deutsche Bank and BNP Paribas's mortgage unit to buy Taylor Bean mortgages. 

But when Taylor Bean collapsed it was unable to repay the notes.  Taylor Bean was once the 12th-largest mortgage originator in the United States but went bankrupt in August. 

Deutsche Bank and BNP filed the original suit in November 2OO9, saying Bank of America breached its obligations on a total of more than $1.7 billion of mortgage-related transactions.

The cases are:  Deutsche Bank AG v Bank of America, U.S. District Court for the Southern District of New York, No. 09-9784; and BNP Paribas Mortgage Corp v Bank of America, No. 09-9783.   [Reuters, 8/31/11]