Bank of NY Mellon must face lawsuit on Countrywide - News and Current Events | futures trading

Go Back

> Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events

Bank of NY Mellon must face lawsuit on Countrywide
Started:April 3rd, 2012 (08:02 PM) by kbit Views / Replies:218 / 0
Last Reply:April 3rd, 2012 (08:02 PM) Attachments:0

Welcome to

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Thread Tools Search this Thread

Bank of NY Mellon must face lawsuit on Countrywide

Old April 3rd, 2012, 08:02 PM   #1 (permalink)
Elite Member
Aurora, Il USA
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
kbit's Avatar
Posts: 5,839 since Nov 2010
Thanks: 3,275 given, 3,321 received

Bank of NY Mellon must face lawsuit on Countrywide

(Reuters) - A federal judge rejected Bank of New York Mellon Corp's bid to dismiss a lawsuit by investors over its role as trustee for mortgage-backed securities that led to an $8.5 billion settlement by Bank of America Corp.

U.S. District Judge William Pauley in Manhattan said on Tuesday that bondholders who invested in 26 trusts alleged to have contained risky mortgage loans from the former Countrywide Financial Corp may pursue claims against Bank of New York Mellon. He dismissed a variety of other claims.

The decision relates to a lawsuit challenging Bank of New York Mellon's performance of its day-to-day obligations as a trustee, which includes ensuring that underlying home loans are properly documented and that bondholders' rights are protected.

Beth Kaswan, a lawyer for four pension funds in Chicago, Michigan and Pennsylvania that brought the case, said the decision leaves intact claims over securities backed by more than $30 billion of loans, and which have suffered more than $9 billion of losses or delinquencies.

She said she believes the decision is the first to let investors in mortgage-backed securities pursue claims against a trustee under the 1939 federal Trust Indenture Act.
"The decision is a watershed," Kaswan said.

Kevin Heine, a spokesman for Bank of New York Mellon, said the company was pleased that the court narrowed the issues to be considered and removed the vast majority of trusts from the suit. "We respectfully disagree with ruling's application of the Trust Indenture Act to non-indenture securitizations and will continue to defend against those claims," he said.

Countrywide had been the largest U.S. mortgage lender before being acquired by Charlotte, North Carolina-based Bank of America in July 2008.

The lawsuit was filed six weeks after Bank of America reached the $8.5 billion settlement in June, which was to resolve claims by investors in 530 mortgage securitization trusts that lost billions of dollars when the housing market collapsed.

Some investors in that case faulted Bank of New York Mellon, which negotiated the accord, for accepting a low payout. The settlement was intended to resolve many of Bank of America's liabilities from the Countrywide purchase.

In the current case, the pension funds accused Bank of New York Mellon of negligence and breach of fiduciary duty for doing nothing to remedy Countrywide's inadequate servicing of home loans contained in the trusts.
The bondholders said Bank of New York Mellon failed to take possession of loan files, including the original mortgage notes, or require Countrywide to fix or buy back defective loans.

Such failures "created considerable uncertainty" and should make the bank responsible for bondholder losses, regardless of the fairness of the $8.5 billion settlement, the complaint said.

Pauley said the bondholders could pursue claims that Bank of New York Mellon did not properly notify them that Countrywide had defaulted on some obligations, whether as a servicer or as a mortgage lender.
The judge nonetheless said the bondholders could sue only on the basis of the 26 trusts in which they invested, not all 530 trusts covered by the $8.5 billion settlement.

On February 27, Bank of America won a victory when the 2nd U.S. Circuit Court of Appeals ruled that the $8.5 billion settlement should be reviewed in a New York State court.

That ruling reversed Pauley's October decision to move the case to federal court. It meant the settlement's fairness will be reviewed under a state law that gives Bank of New York Mellon wide discretion to negotiate with bondholders.
The case is Retirement Board of the Policemen's Annuity and Benefit Fund of the City of Chicago et al v. Bank of New York Mellon, U.S. District Court, Southern District of New York, No. 11-05459.

Bank of NY Mellon must face lawsuit on Countrywide - Yahoo! Finance

Reply With Quote

Reply > Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events > Bank of NY Mellon must face lawsuit on Countrywide

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

An Afternoon with FIO trader bobwest

Elite only

NinjaTrader 8: Programming Profitable Trading Edges w/Scott Hodson

Elite only

Anthony Drager: Executing on Intermarket Correlations & Order Flow, Part 2

Elite only

Adam Grimes: Five critically important keys to professional trading

Elite only

Machine Learning Concepts w/FIO member NJAMC

Elite only

MarketDelta Cloud Platform: Announcing new mobile features

Dec 1

NinjaTrader 8: Features and Enhancements

Dec 6

Similar Threads
Thread Thread Starter Forum Replies Last Post
Forex lawsuit against BNY Mellon partly dismissed kbit News and Current Events 0 March 30th, 2012 08:35 PM
Goldman to face mortgage debt class-action lawsuit kbit News and Current Events 0 February 3rd, 2012 11:23 AM
MBIA Wins Summary Judgment Against Countrywide; Bad News For Bank of America kbit News and Current Events 0 January 3rd, 2012 10:54 PM
Bank of New York Mellon is introuble with the state of Massachusetts kbit News and Current Events 0 November 8th, 2011 08:51 PM
Why Bank of America Is Being Haunted by $50 Billion Lawsuit Quick Summary News and Current Events 0 September 28th, 2011 04:30 PM

All times are GMT -4. The time now is 04:14 PM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts

Page generated 2016-10-24 in 0.12 seconds with 19 queries on phoenix via your IP