Mortgage bond investors sued over shoddy mortgages originated by Bank of America’s Countrywide unit. Bank of New York Mellon, the trustee for the bond investors, originally agreed to accept an $8.5 billion settlement five years ago. But in the ensuing years, a legal battle raged over whether Bank of New York Mellon acted within its authority when it agreed to settle, according to a report.
The court finally found that the bank had acted properly, and in May a New York state judge approved a “Settlement Order and Partial Final Judgment” for 512 of the 530 trusts involved in the settlement, HousingWire reported.
Under the settlement, Bank of America agreed to pay $8.5 billion to Bank of New York Mellon, the trustee for 530 Countrywide mortgage bond trusts and 22 institutional investors. Each trust’s share of the settlement was determined by a third-party expert, HousingWire reported.
Finally, Bank of New York Mellon distributed payments to 512 of the 530 trusts.
“Nearly five years after the settlement was reached, bondholders from most of the 530 trusts included in the settlement received payments on the June 2016 distribution date,” a Fitch report noted.
The 18 trusts not yet paid off face “further legal hurdles” before they can expect payment, the Fitch report said.
Mortgage bond investors are finally getting paid the $8.5 billion settlement they’re owed in an agreement involving Countrywide mortgage bonds.