Bank of America gets extension from investors on mortgage buybacks
Bank of America (BAC) and investors seeking to force the lender to buy back bad mortgages pooled into securities agreed on an extension to work out the concerns. Investors from Pacific Investment Management Co., BlackRock (BLK), MetLife (MET), Freddie Mac, and the Federal Reserve Bank of New York sent a letter in mid-October imploring BofA's Countrywide – which originated the loans – and the trustee of the bonds, Bank of New York Mellon, to buy back $47 billion of failed private-label mortgage-backed securities. The investors' lawyers gave Bank of America 60 days to fix issues with Countrywide's servicing failures on those loans or Bank of New York Mellon should declare it in default on its servicing contracts. "This extension will permit the parties to continue constructive dialogue around the concerns raised," BofA said in a statement released Wednesday. The agreement covers all of the securitizations listed on BofA's website. Attorneys for Bank of America claimed the investors misled the public and demanded "sufficient factual basis for their allegations." An attorney at the Houston law firm Gibbs & Bruns, which represents clients holding more than one-quarter of the voting rights of some of the RMBS in question, told HousingWire in November they simply seek "to hold Countrywide to its contractual agreement to repurchase loans that it modifies as a cure for predatory lending." Write to Jon Prior.