New York Attorney General Eric Schneiderman renewed his opposition to Bank of America Corp. (BAC)’s proposed $8.5 billion mortgage-bond settlement, saying the deal covers “a small fraction” of investor losses.
Schneiderman’s office asked a New York state judge today to allow it to intervene in the case, saying in a court filing that there are “serious questions about the fairness and adequacy of the proposed settlement.”
“The proposed cash payment represents only a tiny percentage of the losses investors have faced and will continue to face,” the attorney general said.
Schneiderman’s request comes after litigation over the settlement was sent back to state court from federal court for consideration. He previously raised objections to the agreement and won approval from a federal judge to intervene and participate in the case.
The settlement would resolve claims from investors in Countrywide Financial Corp. (CFC) mortgage bonds. Bank of America acquired the mortgage lender in 2008. Bank of New York Mellon Corp., as trustee for investors, is seeking approval of the deal in state court.
The attorney general’s office said in a letter today to New York State Justice Barbara Kapnick, who is overseeing the case, that it has been unable to reach an agreement on the intervention with other parties in the case.
In its court filing, the attorney general removed claims first filed last year against BNY Mellon over its role as trustee and will no longer pursue them as part of the Countrywide settlement, Danny Kanner, a spokesman for Schneiderman, said.
“We have separated our affirmative claims from our intervention motion, and intend to aggressively pursue the state’s interest through every means available, including further investigation and litigation if necessary,” Kanner said.
Lawrence Grayson, a Bank of America spokesman, declined to comment on the attorney general’s filing. Kevin Heine, a spokesman for BNY Mellon, didn’t respond to an e-mail seeking comment.
The case is In the application of the Bank of New York Mellon, 651786-2011, New York State Supreme Court (Manhattan).