Bank of America Corp., which is seeking approval for an $8.5 billion mortgage-bond settlement, was sued by investors that want the bank to buy back loans underlying their securities.
Bank of America must buy back the loans because its Countrywide Financial unit breached representations and warranties about them, Walnut Place LLC and related entities said in a complaint filed yesterday in New York State Supreme Court.
The lawsuit comes as Bank of America is seeking court approval to pay $8.5 billion to resolve claims from mortgage investors and avoid repurchasing loans packaged into bonds by Countrywide.
Walnut Place has “serious concerns about the adequacy of the settlement and the conflicts of interest of the parties that negotiated it,” the company said in the complaint. “Countrywide and Bank of America agreed to pay only $8.5 billion as a settlement of claims that are worth many times that amount.”
Walnut Place previously sued Bank of America over a different trust that holds mortgage loans and issued securities to investors.
Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment on the new complaint.
The case is Walnut Place LLC v. Countrywide Home Loans Inc, 652146-2011, New York State Supreme Court (Manhattan).