Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Market
Court Approves $500M Settlement by BofA/Countrywide in MBS Lawsuit
LOS ANGELES (12/11/13)--A $500 million settlement between Bank of America and investors who claimed its Countrywide unit misrepresented mortgage-backed securities has been finalized by a federal judge in Los Angeles.
 
U.S. District Judge Mariana Pfaelzer denied investors the chance to recoup losses from Countrywide's parent company. Pfaelzer followed prior rulings and agreed with the Charlotte, N.C.-based multinational bank that allowing investors to seek additional damages could bankrupt Countrywide (Bloomberg.com Dec. 10).
 
The class-action lawsuit was based on allegations that Countrywide misled investors about the quality of home loans at the heart of mortgage-backed securities. Countrywide was taken over by Bank of America in 2008, a few months before the subprime mortgage contributed to the global financial system collapse.
 
Bank of America is also on the verge of settling an $8.5 billion lawsuit over mortgage-backed securities in New York state court. That deal seeks to resolve a dispute over Countrywide's alleged breach of contract for failing to replace delinquent loans aggregated for the financial instruments.
 
Bank of America still faces litigation from investors who opted out of the class-action lawsuit finalized Tuesday. They're seeking claims on securities excluded by Pfaelzer after the first case was filed in 2007.
 
The National Credit Union Administration has sued a number of Wall Street banks in similar cases. In November, JP Morgan agreed to pay the NCUA $1.4 billion in a settlement over mortgage-backed securities issued, underwrote and sold to now-defunct corporate credit unions in 2006 and 2007 (News Now Nov. 20). The wholesale lenders collapsed in 2009 due, in part, to the faulty instruments.

The federal regulator has also settled claims of more than $170 million with Citigroup, Deutsche Bank Securities and HSBC. It is still involved in suits against RBS Securities, Wachovia Capital Markets and Wells Fargo, Barclay's Capital Inc., Goldman Sachs, and UBS Securities.


RSS





print
News Now LiveWire
#creditunions celebrate #EarthDay2015 by being green aware with e-statements, hosting shred events, planting trees
11 hours ago
From @WSJ: 33% of companies say it took them more than 1 yr to discover a data breach. http://t.co/a0MxV68X6t http://t.co/lkglx6WvKs
15 hours ago
.@CAMCouncil taps into @MICreditUnions' career, tech training resources http://t.co/sotnfCUgIo
16 hours ago
#Inflation ticks up in March, still relatively flat #NewsNow #Market http://t.co/PyAvwdkJ4M
17 hours ago
#NewsNow Ill. league groups elect board, exec officers http://t.co/KAG8MtbGsv
17 hours ago