In the latest update in a $72 million residentialmortgage-backed securities suit filed by CUNA Mutual Group againstStandard & Poor's, a New York court has ordered the agency toturn over all relevant records.

According to a ruling filed Thursday with the U.S. DistrictCourt for the Southern District of New York, S&P must produceall documents in its electronic deal files connected to the RMBScertificates that were sold to CUNA Mutual by RBS Securities andrated by S&P.

Judge Naomi Reice Buchwald also requested all documents thatshow any evidence of pressure or coercion by RBS as well as filesthat indicate S&P's response to the alleged acts of pressure orcoercion.

“We are pleased with the court's decision to order Standard& Poor's to produce records related to the $72 million offailed mortgage-backed securities CUNA Mutual Group bought from RBSSecurities,” wrote Phil Tschudy CUNA Mutual media relationsmanager, in a Friday statement to Credit Union Times.

He added “As we previously stated, we consider the documents tobe highly relevant to our claims against RBS as they relate to thequestion of RBS' role in S&P's rating of the mortgage-backedsecurities at issue in the litigation against RBS.”

Tschudy clarified statements made in other trade publicationsthat included claiming CUNA Mutual's suit questioned the role ofrating agencies. Rather the company's claim “is about themisrepresentations made by RBS to us,” he noted.

Tschudy also said statements regarding CUNA Mutual's filing ofmotions to compel against Fitch Ratings and Watterson Prime LLCresulting in the production of records connected to the failedinvestments are not accurate, as had been previously reportedelsewhere.

In March, CUNA Mutual asked the U.S. Court for the WesternDistrict of Wisconsin to issue an order that would require RBS to buy back $72 million in failed residentialmortgage-backed securities. The securities were sold to CUMISInsurance Society and MEMBERS Life Insurance Co., both subsidiariesof CUNA Mutual in Madison, Wis.

In that motion, CUNA Mutual said CUMIS invoked a right ofrescission that would require RBS buy back the mortgage-backedsecurities.

Between 2004 and 2007, CUNA Mutual said RBS “induced” it to buy15 certificates in 10 separate RMBS offerings by makingrepresentations about the credit quality of the pools of mortgageloans collateralizing those RMBS, according to CUNA Mutual'scomplaint.

CUNA Mutual said it relied on RBS's quantitative representationsin deciding to purchase 15 certificates in the 10 separate RMBSofferings. After CUNA Mutual's purchases, all 10 of the securitiesperformed poorly and the 15 certificates have since lost much oftheir value, according to the complaint.

CUNA Mutual said it is seeking to recover $72 million, theamount it would take for RBS to buy back the failed RMBS.

Before it filed the lawsuit, CUNA Mutual said it commissioned aforensic investigation of the loan pools collateralizing the 10RMBS to test the accuracy of RBS's quantitativerepresentations.

It sampled 17,949 loans from each transaction and conducted aretroactive appraisal using valuation models and historical data totest RBS's representations about LTV and CLTV ratios. CUNA Mutualalso analyzed public records to test RBS's representations aboutowner occupancy rates.

CUNA Mutual said its investigation revealed that RBS'squantitative representations in the offering documents of the 10RMBS were false at the time they were made. Specifically, RBS“dramatically understated the LTV or CLTV ratios of the loan poolsunderlying the 10 RMBS.”