Bank of America is near a $8.5 billion settlement over securities it recommended to high profile investors BlackRock, MetLife, and the Federal Reserve Bank of NY.
The investors alleged that securities they bought before the financial crisis from Countrywide Financial Corp. (which BOA acquired) were composed of loans that didn’t meet sellers’ promises about the quality of the borrowers or the collateral.
A deal would end a nine-month fight with a group of 22 investors that hold more than $56 billion in mortgage-backed securities at the centre of the dispute, including giant money manager BlackRock Inc., insurer MetLife Inc. and the Federal Reserve Bank of New York.
This is a huge settlement and shows what a good lawyer can do. Bank of America hasn’t agreed yet, but according to the WSJ, it’s close to.