According to Bloomberg, Bank of America’s (BAC) Countrywide unit and investors in its devalued residential mortgage-back securities segment will ask a federal judge to overrule objections from the Federal Deposit Insurance Corp. and approve a $500 million class-action settlement.
The FDIC, as receiver for 19 failed banks that had invested in the securities before the collapse of the U.S. housing market in 2007, objects to the settlement, saying it favors a small group of investors whose securities were among those owned by the plaintiffs that filed the first securities-fraud claims against the mortgage lender.
"Named plaintiffs and class counsel have a conflict of interest with the members of the class that invested in 9,325 of the 9,383 covered tranches," the FDIC said in its Oct. 7 objection to the settlement.
