BofA Sued By Homeowners To Block $8.5 Billion Mortgage Settlement

NEW YORK (Reuters) - A group of borrowers sued Bank of America Corp to block its proposed $8.5 billion settlement over mortgage-backed securities losses, and dozens of additional investors lodged objections to that accord.

The challenges were filed as investors who bought securities covered in the settlement faced a Tuesday deadline over whether to intervene in the case, which is overseen by New York State Supreme Court Justice Barbara Kapnick in Manhattan.

Among those to object is American International Group Inc, which is separately suing Bank of America for $10 billion for misrepresenting the quality of mortgage-backed debt it bought. Others that have objected include the Federal Deposit Insurance Corp, attorneys general of New York and Delaware, and a variety of banks, insurers and investment funds. Some objectors want to move the case to federal court.

The borrowers in the new lawsuit claim they are among the homeowners whose mortgages are contained in the 530 trusts covered by the $8.5 billion settlement.

They asked a federal judge to issue an injunction that blocks the settlement, and force Bank of America and Bank of New York Mellon Corp, the trustee that negotiated the accord, to properly service their loans.

(Reporting by Jonathan Stempel)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[Red70]

03:04 PM on 09/01/2011

Homeowners Sue to Block BofA/BNY Deal
Details
http://abigailcfield.com/?p=272

[fineartgalaxy]

10:10 AM on 09/01/2011

Now we are talking. Everybody should be suing all banks for driving all of our homes values into the ground. Come retirement age there is nothing in terms of home values. Vandalism of the real estate equities market. This is white collar crimes at their best. We need PR. That is Prosecution and Restitution. Prosecution of the banks and resitution of stolen equities and goods. Same wityh Wall Street.

[gonealreb]

01:46 AM on 09/01/2011

While skimming the comments, I notice a large number of stupid comments about this being Obama's fault (like the earthquake and the hurricane). In fact the Bush administration did the original Bank Bailout, you can blame GM's failure on Obama - oh, but GM didn't fail whereas the big banks are truly walking dead, they are effectively bankrupt if they and S&P are made to pay fully for the fraud they perpetrated.

[AlsoSarah]

09:15 PM on 08/31/2011

EXCELLENT!

[Tarpon22]

05:44 PM on 08/31/2011

I reccomend EVERYONE that has a Mourtgage with BofA or anyone who has a bank account and had trouble with them SUE THEM.

Everyone should sue them for everything at the same time and put them out of business.

They are crooks and thieves.

And of course

Ron Paul 2012
The REAL President

[Larri Brady McKnight]

08:55 AM on 09/01/2011

It looks like that's happening. Now, all people need to do is start the same tactic with all the other large banks out there. Then we'll have real change.

People out here in the real world are mad. Politicians and the Justice Department need to start paying attention, and start prosecuting them for criminal malfeasance. That would start to fix the problem, and show citizens that something is being done. Protecting the Banksters is going to do nothing but make people angrier.

[aforbes808]

03:15 PM on 08/31/2011

$$$$$$$ BANKSTERS $$$$$$$

[Tarpon22]

07:56 AM on 08/31/2011

SUE BOFA into the ground.
Maybe then we can start arresting the Bankers.

The whole stettlement with the AG's is compleltly corrupt and the AG from Iow that is heading it up is compleltly dirty and corrupt.

[AlsoSarah]

09:16 PM on 08/31/2011

There are two AG's against the settlement. Biden and the New York AG.

[kostya]

07:21 AM on 08/31/2011

It is interesting that when you quote Ezra Pound, one of America's biggest poets, your comment gets bounced. Pound died in 1972, so it's probably time to get over it.

[sskepticall]

05:56 AM on 08/31/2011

This country and our representatives that are elected by us to protect us from the thievery of financial institutions are almost completely corrupted by the campaign support by financial giants such as BofA.

Please read about what prompted this settlement and how BofA and other financial giants fraudulently certified (and they have admitted they did this) home loan records so that they could satisfy each state's requirements for what is needed to initiate and complete a foreclosure.

Here it is in a nutshell. Financial giants don't have the loan documents that make up the loan portfolios that are needed to make their claim in court. They instead had their workers certify that they actually had the records - though they now admit they did not. States accepted these certifications. The banks are corrupt, the courts are corrupt and the states are corrupt.
Some progressive judges have invalidated the claims by the banks in their courts because without the documents the banks couldn’t make their cases. Others states have ZERO consumer protection and foreclosures were granted like rocket dockets. Little know fact – people were losing their homes WHILE paying their mortgages. They were found to no longer be qualified for the amount of the loan – though they were paying them.

The banks must be required to produce the documents. If someone is paying their loan there should never be any reason they lose their homes to foreclosure.

This settlement amount and terms are anti-consumer. Where is the outrage???

[Periwinkle]

07:29 AM on 08/31/2011

A great post that gets right to the meat of the matter. Not only were some people still paying their mortgage, I read one person was foreclosed on for making the payment early! The blanket settlement is a travesty . . . and what's the point? Campaign donations? Six figure board positions in the future? It sure isn't the well being of consumers.

[lloydc123]

07:48 AM on 08/31/2011

I believe you are correct.

[grizzly bear55]

04:57 AM on 08/31/2011

It's funny that the same people who did not pay their mortgages and caused these defaults are blaming the banks for their misery.

There are two issues here, the defaulters caused the real estate crash and the real estate crash caused the uncovering of the Ponzi schemes( the sale of bundled sub-prime mortgages) that has nothing to do with the defaulting home owners.

[aeuropeanvoice]

06:10 AM on 08/31/2011

What a gobbledygook.
Wall Street was perfectly happy with their financial products as long as the price of real estate kept going up.
They designed these mortgages ,sub-prime loans and derivatives to maximize profits .
Once the housing market collapsed they were trapped in their schemes by the undesired toxic effects of their own products.
Untill then every scenario was beneficial to them.
The mortgage taker pais,they made profit.If the mortgage taker could pay,they also made profit by reselling the real estate at higher prices.
But when the real estate marker collapsed repossession of the property led to loss in the subsequent sale of it.
For the first time the banks did not win on all the fronts.
They called that a crisis.
It was their products,designed by them and only for their own profit.
How can you possibly blame this new undesired effect on their profit on the mortgage takers.
It doesn't make any sense.
It's just the simplistic brainwash from the Wall Street bankers and the teabaggers that you are repeating.

[cats530]

07:33 PM on 08/31/2011

you are absolutely right - I faved the bear guy by accident - oy!

[lloydc123]

07:50 AM on 08/31/2011

Whoa cowboy! Borrowers have no POWER to get a loan, lenders have complete POWER to give a loan.

[wonketteRAWKS]

03:52 AM on 08/31/2011

What will Obama and Geitner do now about their quick settlements? They've already kicked out Schneidermen. Who's next?

[grizzly bear55]

05:05 AM on 08/31/2011

Nothing, the legal system will shut down these lawsuits, as a reasonable global settlement is in the interest of all parties, and all these interventions are without legal substance.

[ByAndForThePeople]

04:09 PM on 08/31/2011

Please explain how this kind of settlement is in the interest of ordinary citizens who are having their houses repossessed. No? Well, then it's not in the interest of "all parties". And that makes it not "reasonable". And let's let the courts decide whether there is any "legal substance".

[AlsoSarah]

09:23 PM on 08/31/2011

Well hopefully with this injunction, there will be no settlement. I think that the Obama Admin were hoping that American citizens would not have the intelligence to realize what was going on with this settlement.

[breakingpoint]

03:43 AM on 08/31/2011

homeowners will lose

[grizzly bear55]

05:06 AM on 08/31/2011

How?

They have to start by paying their mortgages before screaming on roof tops.

[breakingpoint]

05:32 AM on 08/31/2011

you need to catch up and understand who the real crooks are

it's too late for you to still be this ignorant

[aeuropeanvoice]

06:18 AM on 08/31/2011

The sub prime loans were especially designed by the banks so that the lenders could easily default on the payments.
The banks made money either way until the real estate market collapsed and repossessed houses made less money than the mortgage that covered them.
So please direct your arrows at those that have designed these sub prime loans .
They gambled and lost.When Wall street loses a gamble they call it a financial crisis and are bailed out.
Then they find deluded people such as you to blame the victims for the bail out.
You must learn to dig deeper than superficial talking points and look at the mechanism behind it.

[Help USA Taxpayer]

02:55 AM on 08/31/2011

President Obama once again supports Big Business Banks over the poor --------- even if the President believes the bank is too big to fail the CEO and bank managers are not needed and should be fined their entire amassed personal fortune as part of any settlement and given real hard time criminal sentences

[JimNast]

02:50 AM on 08/31/2011

Is this why BofA general obligation bonds are selling below par?

[grizzly bear55]

05:00 AM on 08/31/2011

No, it's the nervous Nellies who create opportunities for others.

BAC can easily bankrupt country wide and walk away from all these unfounded obligations, their losses would be much smaller and they would put their problems behind them.

[Carolab]

01:27 AM on 08/31/2011

Let's see, Schneiderman, the FDIC, AIG and now this group of borrowers.

Maybe the rest of the state AGs should rethink their position.

BofA is going down.

[TaxpayingVoter]

02:45 AM on 08/31/2011

I heard through an inside source that Chase is eyeballing BofA and a deal is being negotiated.

[grizzly bear55]

05:02 AM on 08/31/2011

the antitrust laws would not allow such merger as it reduces the competition, besides BAC can shed Countrywide legally with all its trouble and walk away from this mess.

[Acharn]

08:01 AM on 08/31/2011

You forgot Beau Biden, the AG in Maryland, and I forget the names of the AGs in New Jersey and Massachusets. Tom Miller, the Iowa AG who started this as a way to get the banks out of their trouble never thought the other AGs might actually want to investigate to see if there was evidence or not. His committee hasn't even looked at any case files.