On Tuesday, the New York state court hearing the $8.5bn Countrywide settlement case said it will limit the number of loan files to be requested from Countrywide to between 150 and 500.

By narrowing the scope of loan files, the decision will effectively reduce the possibility of a protracted legal process, according to a Barclays Capital report.

Intervenors in the case, such as Walnut Place, had requested thousands of loan files from Countrywide in the discovery process to help bolster their case that the settlement amount agreed on by the trustee, BNY Mellon was too low.

The court also set a deadline for the discovery process of early 2013 and scheduled a settlement hearing starting on February 19, 2013.

"While it is still possible for Walnut Place and other intervenors to appeal the decision by Judge Kapnick, the appeal process could run in parallel with discovery and therefore be less likely to cause an interruption in the hearings," explained Barclays analysts.  

 

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