BofA’s $8.5 Billion Accord Approval Appealed by TriaxxChristie Smythe
A group of funds known as the Triaxx entities said it will appeal a New York judge’s approval of Bank of America Corp.’s $8.5 billion mortgage-bond investor settlement because it doesn’t resolve all its claims.
In a dispute revealing tensions between banks and investors over the modification of bad mortgages, the funds said in a statement filed with the notice of appeal today in state court in Manhattan that the settlement failed to cover claims that as much as $31 billion in loans were improperly modified.
Manhattan State Supreme Court Justice Barbara Kapnick approved the settlement in January, ending claims by investors in more than 500 mortgage-securitization trusts that the loans backing the bonds didn’t meet the promised quality. She allowed claims over loan modifications to continue.
“The settlement agreement had to be approved or rejected as a whole,” the Triaxx entities, which previously objected to the settlement claiming that Bank of America’s Countrywide Financial unit was obligated to also buy back modified loans, said in today’s court-filed statement. “Rejecting it as to the loan modification claims required its complete rejection.”
The accord resolved faulty mortgage liabilities that have cost Bank of America at least $50 billion since the financial crisis, most inherited from its 2008 purchase of Countrywide Financial Corp.
Bank of New York Mellon Corp., the trustee for the investment pools, said in February that it would appeal Kapnick’s exclusion of the loan-modification claims from the settlement.
Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment on today’s filing.
The case is In the matter of the application of the Bank of New York Mellon, 651786-2011, New York State Supreme Court, New York County (Manhattan).