Investor group Walnut Place, LLC has ended its opposition to Bank of America Corp.’s $8.5 billion settlement with mortgage-backed securities holders of Countrywide Financial Inc. Walnut sought to intervene in the settlement, alleging that BNY Mellon Corp., as the trustee, had not advised them about the settlement negotiations and concluded the agreement in private. Walnut sought additional information regarding the settlement, but was apparently rebuffed by the bank and the trustee.
The $8.5 billion settlement includes 500 trusts, which had an original total principal balance of more than $424 billion in Countrywide-backed securities. The settlement also limits “robosigning” practices and other servicing issues.
Walnut’s announcement followed an earlier New York state court defeat for the investor group, in which the court dismissed Walnut’s claims challenging the bank’s handling of its mortgage-backed securities. A New York appeals court held that Walnut’s claims were limited by the “no-action” clauses in the investment agreements. (“Investors End Fight Against BofA's $8.5B MBS Settlement,” Law360, July 23, 2012).