Friday, October 21, 2011

BOA ---- In Trouble Again!


Yet, ANOTHER reason to be on this Monday Nights call at 9pm EST on www.FreedomsRadio.com!
Mitchell J. Stein and Company will be our Special Guest Speaker~!


Reuters) - A judge on Wednesday decided to keep a proposed $8.5 billion settlement over Bank of America Corp's (BAC.N) mortgage-backed securities in federal court, potentially dragging out the litigation.
The stakes are high for Bank of America, which had hoped the agreement would resolve uncertainty over potential liabilities tied to pools of soured loans sold to investors by Countrywide Financial Corp, the mortgage lender it bought in 2008.

Countrywide was the largest U.S. mortgage lender before being taken over by BofA, a disastrous purchase analysts say has effectively cost more than $30 billion after accounting for lawsuits and writedowns.
Any delay in resolving the case will add to uncertainty about the bank and could result in a higher payout to the mortgage-backed securities investors.

The proposed agreement also calls for Bank of America to improve its mortgage servicing practices, but lawyers for a class of homeowners argued the servicing changes called for would not be corrective.

A number of investors objected to the proposed settlement, which Bank of New York Mellon Corp (BK.N), the trustee for the mortgage securities, presented to a state judge in June for approval. A hearing to consider approving the deal had been scheduled for November 17 in New York State Supreme Court.

In Wednesday's written ruling, U.S. District Judge William Pauley in Manhattan agreed with one objector, institutional investor Walnut Place, that the case belonged in federal court.

"The settlement agreement at issue here implicates core federal interests in the integrity of nationally chartered banks and the vitality of national securities markets," Pauley's order said in part. "A controversy touching on these paramount federal interests should proceed in federal court."

HEARING SET FOR NOV. 3

The judge ordered the parties to appear in his court on November 3 to discuss management of the case.

Among others who sought to block the accord is New York Attorney General Eric Schneiderman. He accused Bank of New York Mellon of fraud for misleading investors about its role and saying the accord provided benefits that put that bank in a conflict of interest.

Danny Kanner, a spokesman for Schneiderman, had no immediate comment on Wednesday's ruling.

In response to the ruling, Bank of America spokesman Lawrence Grayson said, "We believe there are compelling reasons why the agreement should receive judicial approval in the court with appropriate jurisdiction."

Bank of New York Mellon spokesman Kevin Heine had no immediate comment. A lawyer for Walnut Place could not immediately be reached for comment.

In general, when complex financial litigation is removed to federal court from state court, it slows down the process, according to lawyers not involved in the case.

"The judge is going to want to look through the case, he's going to want to review what was filed in the state court, see new submissions and no doubt hear from counsel for the parties directly," said Mark Rifkin, a lawyer with Wolf Haldenstein Adler Freeman & Herz LLP in New York.

Last month, Pauley peppered lawyers for Bank of New York Mellon and Walnut Place with questions in the bid by Walnut for the case to be resolved under the Class Action Fairness Act of 2005. CAFA requires big-money class actions to be supervised by a federal judge.

The proposed settlement was filed in state court as a special proceeding known as Article 77 and not as a class action. Article 77 in state court usually covers family trust matters. The agreement covers 530 mortgage pools with $174 billion of unpaid principal balances.

Walnut Place argued in court papers that negotiations between the trustee and investors were held in secret.

But the trustee said it had given public notice of talks over eight or nine months with investors including BlackRock Inc (BLK.N) and Allianz SE's (ALVG.DE) Pimco.

The cases are re: The Bank of New York Mellon, New York State Supreme Court, New York County, No. 651786/2011; and The Bank of New York Mellon et al v. Walnut Place LLC et al, U.S. District Court, Southern District of New York, No. 11-05988.

3 comments:

Anonymous said...

http://timothymccandless.wordpress.com/2011/10/21/the-law-of-capitalism-the-mass-miss-joinder/ http://pastebin.com/yTKCV6zu
http://4closurefraud.org/ http://getoutofdebt.org/
http://www.nakedcapitalism.com/2011/09/banks-have-hissy-fit-cancel-meeting-with-attorneys-general-due-to-fhfa-mortgage-litigatiion.html
http://www.dobielaw.org/About-Us.html
http://www.loansafe.org/forum/loan-modification/35972-mitchell-j-stein-atty-california.html http://www.courthousenews.com/2010/06/30/28523.htm
http://www.thestreet.com/story/11050228/1/mitchell-stein-esq-consumers-beware-of-bogus-claims-about-landmark-bank-of-america-lawsuit.html

Anonymous said...

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Anonymous said...

http://www.reuters.com/finance/stocks/overview?symbol=BAC.N
http://www.reuters.com/finance/stocks/BAC/key-developments
http://theglobalrealm.com/2011/10/20/u-s-judge-takes-8-5-bln-bofa-deal-from-state-court/ http://www.reuters.com/article/2011/10/20/us-bankofamerica-mortgage-idUSTRE79I75Q20111020
http://www.syrfirecu.net/?feed=Business%20and%20Finance
http://newsfeedresearcher.com/data/articles_b43/court-bank-federal.html
http://www.financialnewstoday.org/2011/10/judge-takes-8-5-billion-bofa-deal-from-state-court-reuters/
http://www.buzzbox.com/news/2011-10-20/8-5-billion:bank-of-america/?clusterId=5802221