A big bank’s agreement to pay $8.5 billion to settle litigation over soured mortgage-backed securities has been tied up in legal limbo for five years. Now, finally, the settlement can move forward
Investors will finally receive their $8.5 billion settlement from Bank of America for mortgages originated by its Countrywide unit.
Last week, a New York judge finally approved the settlement order, according to a HousingWire report. The case has dragged on since 2011, when the parties originally agreed to the $8.5 billion settlement. But after the settlement, some investors questioned whether Bank of New York Mellon, which acted as a trustee in the case, had the authority to settle the suit.
Last year, the New York Supreme Court ruled that BNY Mellon had properly executed its legal duties, HousingWire reported. But finalization of the settlement had to wait for the approval of a “Severance Order and Partial Final Judgment.” That approval finally came through last week.
Bank of America's January 2008 acquisition of the then-biggest residential mortgage lender in the nation, Countrywide Home Loans, for $4.1 billion has since cost the megabank tens of billions in settlements and legal expenses, including a record $16.65 billion settlement with the Department of Justice in August 2014 over the sales of faulty securities leading up to the financial crisis.
Last week, a New York judge finally approved the settlement order, according to a HousingWire report. The case has dragged on since 2011, when the parties originally agreed to the $8.5 billion settlement. But after the settlement, some investors questioned whether Bank of New York Mellon, which acted as a trustee in the case, had the authority to settle the suit.
Last year, the New York Supreme Court ruled that BNY Mellon had properly executed its legal duties, HousingWire reported. But finalization of the settlement had to wait for the approval of a “Severance Order and Partial Final Judgment.” That approval finally came through last week.
Bank of America's January 2008 acquisition of the then-biggest residential mortgage lender in the nation, Countrywide Home Loans, for $4.1 billion has since cost the megabank tens of billions in settlements and legal expenses, including a record $16.65 billion settlement with the Department of Justice in August 2014 over the sales of faulty securities leading up to the financial crisis.
