Judge Dismisses Investor Lawsuit against Bank of America

In a victory for Bank of America, a judge has thrown out a lawsuit filed by investors who wanted the bank to buy back mortgage loans underlying securities of more than $1 billion. The case Walnut Place LLC versus Countrywide Home Loans Inc. had been filed in New York State Supreme Court.

The case involves home loans by Countrywide Financial Corp. Bank Of America brought out Countrywide Financial Corp. in 2008. Investors suing under the name Walnut Place filed a lawsuit in 2011 on behalf of a trust which held 6,531 loans.

According to the lawsuit, Countrywide Financial Corp. made several false representations on nearly 66% of the more than 2,000 mortgage loans that the investors investigated. When Walnut Place demanded that Bank of America buy back the bad loans, the bank refused. The lawsuit also alleges that Bank Of New York Mellon, a trustee of Countrywide Financial Corp. who was also named as a defendant, failed to get the banks to buy back the loans.

According to the New York judge, who delivered his verdict, Bank of New York Mellon acted on the investors’ demand, by telling Walnut Place that it needed more time to investigate the matter. Countrywide Financial Corp. offered investors an $8.5 million settlement. According to the New York Judge, this settlement offer did indicate that the trustee had taken action. However, Walnut Place found the $8.5 million settlement too low.

California securities dispute lawyers are often called upon to represent clients in different types of investment litigation. Typically, investors may sue a company because it fails to follow guidelines set by the Securities Exchange Commission, or violates federal and state laws. Most of these violations include broker fraud, breach of fiduciary duty, insider trading and misrepresentation of probability.

Leave a Reply

Your email address will not be published. Required fields are marked *