{"id":5567,"date":"2014-01-31T00:00:00","date_gmt":"2014-01-31T06:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2014\/01\/bank_of_americas_85b_mortgage"},"modified":"2022-05-05T11:58:24","modified_gmt":"2022-05-05T16:58:24","slug":"bank-of-americas-85b-mortgage","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/bank-of-americas-85b-mortgage\/","title":{"rendered":"Bank of America\u2019s $8.5B Mortgage Bond Settlement Gets Court Approval"},"content":{"rendered":"\n

A judge has approved an $8.5B mortgage-bond settlement between Bank of America (BAC)<\/a> and investors. The agreement should settle most of the bank\u2019s liability from when it acquired Countrywide Financial Corp. while the financial crisis was happening and resolves contentions that the loans behind the bonds were not up to par in quality as promised. Included among the 22 investors in the mortgage-bond deal: Pacific Investment Management Co., BlackRock Inc. (BLK), and MetLife Inc. (MET.N). Under the agreement, investors can still go ahead with their loan-modification claims. <\/p>\n

The trustee for over 500 residential mortgage-securitization trusts is Bank of New York Mellon Corp. (BK), which had turned in a petition seeking approval for the deal nearly three years ago for investors who had about $174 million of mortgage-backed securities<\/a> from Countrywide. Now, Judge Barbara Kapnick of the New York State Supreme Court Justice has approved the mortgage-bond deal.<\/p>\n

Kapnick believes that the trustee had, for the most part, acted in good faith and reasonably when determining the settlement and whether it was in investors\u2019 best interests. However, she is allowing plaintiffs to continue with their claims related to loan-modification because, she says, Bank of New York Mellon Corp \u201cabused its discretion\u201d on the matter in that even though the trustee purportedly knew about the issue, it didn\u2019t evaluate the possible claims. Also, the judge said that it makes sense for this one-time payment because it was evident that Bank of New York Mellon was worried Countrywide wouldn\u2019t be able to pay a judgment in the future that came close to the $8.5 billion settlement. <\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

A judge has approved an $8.5B mortgage-bond settlement between Bank of America (BAC) and investors. The agreement should settle most of the bank\u2019s liability from when it acquired Countrywide Financial Corp. while the financial crisis was happening and resolves contentions that the loans behind the bonds were not up to par in quality as promised. 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