Special purpose vehicle Royal Park Investments is suing Bank of America (BAC), Countrywide and several other affiliated entities over the sale of residential mortgage-backed securities that, in some cases, were sold at a total loss of $713 million.
Royal Park was created by Fortis Holding (now Ageas), the Belgian State and BNP Paribas for the purpose of acquiring a portion of the structured credits portfolio of Fortis Bank. The task of Royal Park is to manage the Fortis portfolio as it winds down.
In the lawsuit, the investment vehicle claims it acquired RMBS from the entities valued at $1.6 billion. The special-purchase vehicle that acquired the RMBS claims the underlying loans tied to the mortgage bonds contained underwriting issues that were either misrepresented or never disclosed to Royal Park.
Royal Park suggests Fortis relied on these representations of the loan quality when deciding to buy RMBS that later contained a series of payment issues.
The plaintiff claims BAC and the defendants should be liable, even those these are Countrywide mortgages, under multiple theories of fraud in their presentation of the securities.