Delaware AG joins fight against $8.5 billion servicer settlement
Delaware Attorney General Beau Biden is trying to intervene in the $8.5 billion mortgage servicing settlement that Bank of America (BAC) made with The Bank of New York Mellon (BK) over soured Countrywide Financial mortgage portfolios. Biden, much like the New York Attorney General, said his office filed a motion with the New York Supreme Court arguing the AG's office should be able to intervene to protect investors who were not represented during the negotiations. The attorneys general also seek to preserve possible legal claims against the lender for alleged misrepresentations on toxic mortgage loans sold to investors. The loans were packaged and administered by Bank of New York Mellon, which accepted the $8.5 billion settlement with BofA earlier this year to quash any potential litigation. A Bank of America spokesman said the company doesn't comment on pending litigation. New York Attorney General Eric Schneiderman filed a similar motion last week, requesting his office receive permission to intervene in all legal actions involving the proposed settlement. The Bank of New York Mellon became a key party in the settlement as official trustee for 530 MBS trusts that had a combined principal balance of $424 billion in Countrywide loans. Schneiderman believes the settlement ignores the interests of investors of the MBS pool. He fears the settlement will indemnify affected parties from future litigation and bar investors from seeking the full value of their losses. Write to: Kerri Panchuk.