NY Court signs off on $8.5B BofA settlement over pooled mortgages
Ends nearly three-year battle
After more than two years of legal wrangling, a New York judge signed off on a controversial $8.5 billion settlement between Bank of America (BAC) and The Bank of New York Mellon over toxic mortgage securities.
The case began back in 2011 when The Bank of New York Mellon as trustee of a pool of mortgages owned by investors entered into a settlement deal for $8.5B with BofA to end issues stemming from the mega bank's sale of toxic mortgage-backed securities that negatively impacted investors. Many of the mortgages tied back to Countrywide, which was acquired by BofA during the financial crisis.
The settlement immediately caused a stir with investors pushing back, saying the deal did not adequately assess their interests.
At one point, the New York Attorney General even tried to intervene in the case.
On Friday, the dispute ended with BofA as Judge Barbara Kapnick out of New York signed off on most of the $8.5 billion settlement. The judge held back on only one issue, keeping a part of the dispute over loan modifications alive.
However, the final court order ends what has been a very lengthy legacy battle over toxic mortgages.