An N.Y. judge is considering a petition of investors to intervene in Bank of America's proposed $8.5 billion MBS settlement.
The settlement calls for BofA to pay the amount to resolve claims from investors in Countrywide Financial Corp. MBS. BofA purchased Countrywide in 2008. Bank of New York, along with 22 institutional investors, claim Attorney General of New York State Eric Schneiderman has no standing to intervene in the case.
According to a Reuters report, the bond investors filing to intervene include the Walnut Place group of 11 buysiders, several federal home loan banks, pension funds, and insurers. The proposed intervenors have called the settlement unfair.
The petition to intervene means that BofA can face further legal liabilities over mortgages.
On Friday Bank of New York Mellon Corp., the trustee on the deals covered under the BofA settlement, requested the judge to reject the bid made by Schneiderman on behalf of the bond investors.
The trustee said in the Bloomberg report that the attorney general's questions on whether Bank of New York acted in good faith will derail what should be an expedited proceeding. Bank of New York also said that the claims could take years to resolve.