Bank of America Wins Dismissal of $1 Billion RMBS Lawsuit
According to documents filed in the Supreme Court of the State of New York, Bank of America, as successor to Countrywide Home Loans, won dismissal of a lawsuit filed by investors in mortgage-backed bonds claiming the bank should buy back defective loans underlying more than $1 billion in securities.
The plaintiffs had claimed that when they investigated a portion of the loans in the trusts that were delinquent or had been defaulted by borrowers, and discovered that Countrywide, which originated the loans, made false representations and warranties in the pooling and servicing agreements about the characteristics and credit quality of those loans, materially and adversely affecting the interests of plaintiffs who were supposed to be repaid, with interest, from the cash flow generated by the loan.
Supreme Court Justice Barbara Kapnick said the filing after a lawsuit was “premature under the circumstances” because it came just days after BNY Mellon said it needed more time to evaluate the matter. The investors had directed BNY, which was named a nominal defendant in the lawsuit, to sue Countrywide over the loans.