NY judge OKs $8.5B Bank of America settlement
Updated: Friday, January 31 2014, 01:30 PM EST
Albany, N.Y. - A New York judge has approved the $8.5 billion Bank of America settlement over investor losses from mortgage-backed securities, concluding that trustee Bank of New York Mellon acted reasonably in most regards.
Critics of the settlement, who formerly included New York Attorney General Eric Schneiderman, argued that it represented only a fraction of the losses.
State Supreme Court Justice Barbara Kapner writes in her ruling Friday that BNY Mellon "did not abuse its discretion" in entering the settlement agreement and "did not act in bad faith."
According to court papers, the claims arose from "a massive collapse in value" of mortgage loans in New York trusts in 2007-2008.
The claims were against trust creator Countrywide Financial Corp. and trust servicer Bank of America, which bought Countrywide in 2008.