NY To Block Bank of America Housing Abuse Settlement, Citing Fraud
American Banker disclosed today The Department of Housing and Urban Development settlement with Bank of America, and in court papers filed tonight, New York Attorney General Eric Schneiderman sought to intervene in order to "protect the marketplace and the interests of New York investors, the vast majority of whom otherwise are not present before the Court in this proceeding."
Schneiderman's opposition comes hours after the full reveal of the settlement, "releasing the company from liability for failing to adequately provide alternatives to foreclosure on 57,000 delinquent government-insured mortgages." Investors requested Bank of America repurchase toxic home loans that comprised many mortgage-backed securities, and Bank of America agreed to pay $8.5 billion, which will be allocated to all investors in Countrywide Financial mortgage bonds, but a New York court must approve the deal.
According to Reuters, "the attorney general said in a filing the accord may interfere with his ability to pursue claims against the banks involved, and claims that BofA and Bank of New York may have violated their fiduciary duties in reaching the agreement."
Bank of America and Bank of New York spokesmen declined to comment."
Read the details of the agreement here.