Tags: fdic | bofa | mortgage

FDIC Objects to BofA’s Mortgage-Bond Accord

Monday, 29 Aug 2011 06:30 PM

 

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The Federal Deposit Insurance Corp. is objecting to Bank of America Corp.’s proposed $8.5 billion mortgage-bond settlement with investors, joining investors and states that are challenging the agreement.

The FDIC owns securities covered by the settlement and says it doesn’t have enough information to evaluate the accord, according to a filing Monday in federal court in Manhattan.

Bank of America has agreed to pay $8.5 billion to resolve claims from investors in Countrywide Financial mortgage bonds. The settlement was negotiated with a group of institutional investors and would apply to investors outside that group.

A New York state judge was scheduled to consider approving the settlement in November. An investor group is trying to move the case to federal court.

Andrew Gray, an FDIC spokesman, declined to comment on the filing.

Lawrence Grayson, spokesman for Charlotte, North Carolina- based Bank of America, didn’t immediately respond to an e-mail seeking comment on the filing. Kevin Heine, a spokesman for Bank of New York Mellon Corp., the trustee for the mortgage- securitization trusts covered by the agreement, didn’t immediately respond to an e-mail.

The state case is In the matter of the application of The Bank of New York Mellon, 651786/2011, New York state Supreme Court, New York County (Manhattan).

The federal case is In the Matter of the Application of Bank of New York Mellon v. Walnut Place LLC, 11-cv-5988, U.S. District Court, Southern District of New York (Manhattan).

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