Investor Sues to Block Mortgage Modifications

A lawsuit against Bank of America claims states and banks will short bondholders $8.4 billion and damage the market by cutting home payments

The battle over the mass modifications of troubled mortgages has begun in earnest. On Dec. 1, William Frey, a private investor in mortgage-backed securities, filed a lawsuit in New York State Supreme Court alleging that the proposed modification of some 400,000 home loans originally underwritten by the defunct lender Countrywide Financial is illegal.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.