Bank of America Corp. continues to be a big target in litigation tied to residential mortgage-backed securities, while firms that insure mortgage bonds have been taking their gripes to court.
GMAC Mortgage LLC and Residential Funding Company LLC were named as defendants in three complaints filed on Nov. 29 by Financial Guaranty Insurance Co. in the Supreme Court of the State of New York. The New York-based bond insurer said that the lawsuits are tied to RMBS it has insured.
“FGIC anticipates that it will file additional complaints with respect to other FGIC-insured RMBS transactions sponsored by RFC or GMACM in the near future,” the statement said.
MBS investors who were members of a proposed class settlement in regards to Wells Fargo Mortgage-Backed Certificates Litigation had until Dec. 7 to file their proofs of claim, Bernstein Litowitz Berger & Grossmann LLP recently reported.
Loreley Financing filed a lawsuit in New York State Supreme Court in Manhattan against Wells Fargo Securities LLC over $163.3 million in bad collateralized-debt obligations, Bloomberg reported.
As of September, Goldman Sachs Group Inc. was facing litigation on $15.8 billion in mortgage-related securities, a filing with the Securities and Exchange Commission said.
Among the plaintiffs in the Goldman lawsuits are the Federal Housing Finance Agency; the National Credit Union Administration; Basis Yield Alpha Fund; the Federal Home Loan Banks of Seattle, Chicago, Indianapolis and Boston; the Charles Schwab Corp.; Cambridge Place Investment Management Inc.; Heungkuk Life Insurance Co. Limited; Landesbank Baden-Württemberg; certain Allstate affiliates; The Union Central Life Insurance Co.; Ameritas Life Insurance Corp.; Acacia Life Insurance Co.; Massachusetts Mutual Life Insurance Co.: and The Western and Southern Life Insurance Co.)
A class action against Countrywide was certified by U.S. District Judge Mariana R. Pfaelzer on Nov. 22, Cohen Milstein Sellers & Toll PLLC announced. Members of the class are investors who purchased MBS from eight MBS tranches from Countrywide entities before Jan. 14, 2010. Plaintiffs include the Iowa Public Employees’ Retirement System, the Oregon Public Employees’ Retirement System, the Orange County Employees’ Retirement System and the General Board of Pension and Health Benefits of the United Methodist Church.
The lawsuit, filed in U.S. District Court for the Central District of California, alleges that Countrywide misrepresented the securitized loans.
A $315 million settlement has been reached between Bank of America Corp.’s Merrill Lynch & Co. and MBS investors including lead plaintiff Public Employees’ Retirement System of Mississippi over alleged misleading marketing, the Wall Street Journal reported. The settlement must now be approved by U.S. District Court judge Jed Rakoff — who initially rejected a previous $33 million settlement between BofA and the SEC.
Countrywide was sued by National Integrity Life Insurance Co. for $93.8 million over the abandonment of guidelines by Countrywide on 24 securitizations, Reuters reported. The lawsuit, filed in U.S. District Court in Manhattan, N.Y., seeks to force BofA to repurchase the certificates.
Bloomberg reported that Bank of New York Mellon Corp., which serves as the trustee for BofA deals tied to a proposed $8.5 billion settlement, made a filing in U.S. District Court for the Southern District of New York indicating that Delaware Attorney General Beau Biden shouldn’t be allowed to intervene in the lawsuit.
Moneygram Payment Systems Inc. has sued Citigroup Inc. over $140 million in losses it suffered on collateralized-debt obligations backed by mortgage assets, Bloomberg said in a news story. Moneygram claims that the assets became “junk” on the same day it acquired them.
Charges were dismissed against former State Street Chief Investment Officer John P. Flannery and co-worker James D. Hopkins, according to the Boston Globe. The judge wrote that neither executive “was responsible for, or had ultimate authority over, the allegedly false and materially misleading documents” sent to clients.
DLJ Mortgage Capital Inc. was sued in New York State Supreme Court by Assured Guaranty Corp. over alleged misrepresentation of the loan quality on hundreds of millions of dollars in mortgage securities it insured, Bloomberg reported.
