A federal judge has allowed to proceed a Belgian investor's lawsuit that blames Bank of New York Mellon for about $1.1 billion of losses related to its role as trustee for residential mortgage securities.

The Belgian group Royal Park Investments claims BNY Mellon failed to monitor the underwriting and servicing of five RMBS trusts between 2005 and 2007. Royal Park seeks class-action status for its lawsuit.

Judge Gregory Woods, of U.S. District Court for the Southern District of New York, ruled that some of Royal Park's claims could proceed, including claims for breach of contract and breach of trust.

"It would be implausible to assume that somehow all the mortgage loans underlying the [trusts] miraculously avoided the pervasive practices of the industry at the time," Woods wrote in a court filing.

Woods also approved Royal Park's claim that BNY Mellon violated its responsibility to give notice of known defaults in the mortgage securities.

Kevin Heine, a spokesman for BNY Mellon, declined to comment.

Royal Park is pursuing similar claims against other banks in their role as trustee with oversight of RMBS, including Deutsche Bank and HSBC Holdings.

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