BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
NEW YORK (Reuters)—Bank of America Corp. on Thursday won dismissal of a lawsuit by investors who wanted the bank to buy back mortgage loans that underlie more than $1.06 billion of securities.
The case is tied to risky home loans issued by Countrywide Financial Corp., which Bank of America bought in 2008. It was brought by investors under the name Walnut Place.
The judge who threw out the lawsuit is the same one who will decide whether to approve a proposed $8.5 billion settlement with virtually all investors who lost money on Countrywide mortgage-backed securities, including Walnut Place.
The suit "was premature," New York state Supreme Court Justice Barbara Kapnick wrote in her decision.
The judge pointed out that the proposed settlement includes the claims in Walnut Place's suit. It covers Walnut Place's trusts, along with 528 similar ones. Walnut Place is a name used by the Baupost Group L.L.C., a Boston-based hedge fund run by money manager Seth Klarman.
Like many investors in mortgage-backed securities before the mortgage crisis, Walnut Place claimed in its February 2011 lawsuit that Countywide made false representations about the characteristics and credit quality of loans underlying the securities.
Walnut Place said Charlotte, N.C.-based Bank of America refused its demand that it buy back the loans and that Bank of New York Mellon, the Countrywide securities trustee, who also was a defendant, "unreasonably failed" to sue the bank to repurchase the loans.
In granting the motion to dismiss the suit, Justice Kapnick said Bank of New York Mellon did act on the investors' complaints. The trustee told Walnut it needed additional time to investigate the matter, the judge said in the ruling.
In addition, the $8.5 billion settlement over Countrywide mortgage-backed securities showed that the trustee took action, the judge said.
The settlement was reached in June with 22 institutional investors, including BlackRock Inc. and MetLife Inc., to resolve liabilities from Bank of America's $2.5 billion purchase of Countrywide in July 2008.
Walnut Place, which was not part of settlement talks but would be bound by the terms of the agreement, has complained the $8.5 billion payout was too low.
The agreement must be approved by Justice Kapnick in a separate proceeding. Walnut lost a bid last month to have the proposed settlement reviewed in federal court.
New York attorney David Grais, who represents Walnut Place, did not immediately respond to a request for a comment.
Lawrence Grayson, a spokesman for Bank of America, said the bank was pleased with the ruling.
Kevin Heine, a spokesman for Bank of New York Mellon, said the trustee was glad the court recognized that the bank acted properly in the matter.
The case is Walnut Place L.L.C. et al. vs. Countrywide Home Loans Inc et al., New York State Supreme Court, New York County, No. 65097-2011.
(Reuters)—MBIA Inc. claimed it has new evidence of "widespread mortgage-origination fraud" at Bank of America Corp.'s Countrywide unit, hoping to bolster its $1.4 billion lawsuit accusing that unit of fraudulently inducing it to insure risky mortgage-backed securities.