Upcoming Classes

Search CFLA's Article Archive:

Walnut Place Drops Objections to $8.5 Billion BofA Deal

reuters.comJuly 26, 2012

By Karen Freifeld

(Reuters) - Walnut Place, an entity that had challenged a proposed $8.5 billion settlement between Bank of America Corp (BAC.N) and investors in failed mortgage-backed securities, has withdrawn its objections to the deal.

The development on Monday was a step forward for Bank of America as it tries to clear up liability for toxic securities issued by Countrywide Financial Corp, the mortgage lender it acquired at the height of the financial crisis in 2008.

The agreement was reached in June 2011 between Bank of New York Mellon, acting as trustee, and institutional investors including BlackRock Inc (BLK.N), Metlife Inc (MET.N) and Allianz SE's (ALVG.DE) Pacific Investment Management Co.

Walnut Place, a proxy for Boston-based hedge fund Baupost Group, had invested more than $1 billion in the securities. It did not participate in settlement negotiations and later complained that the deal was inadequate.

Baupost Chairman Seth Klarman declined to comment on Monday on why Walnut Place had withdrawn its objections. Walnut Place's attorney, Owen Cyrulnik of Grais & Ellsworth, also declined to comment.

The decision came just weeks after a New York state appeals court upheld a decision dismissing a lawsuit brought by Walnut Place in February 2011 demanding that BofA buy back the loans.

Several of the soured residential mortgage-backed securities owned by Walnut Place were scheduled to be sold off in the secondary market on Tuesday, according to a database run by Empirasign Strategies, a New York-based capital markets data provider.

Representatives of Bank of America and Bank of New York Mellon declined to comment on the withdrawal of Walnut Place's objections.

Kathy Patrick, a partner at Gibbs & Bruns, a Houston-based law firm that negotiated the settlement for the institutional investors, said it was a welcome development. With Walnut Place withdrawing, only a "small minority" of settlement opponents remain, she said.

But Dan Reilly, an attorney who represents American International Group Inc, which has also intervened in the proceedings, said Walnut Place's decision will not end the case.

"We're still going forward," Reilly said. "We've got a hearing next week and all the issues that have been raised are still in play."

The decision on whether to approve the settlement, which could become a template for deals with other banks that face similar claims, is before Justice Barbara Kapnick in New York state court in Manhattan.

Other objectors include the attorney generals of Delaware and New York, who have raised questions about whether the settlement is reasonable. The two attorney generals, through their offices, declined to comment on Walnut Place's withdrawal.

Investors claim Countrywide breached promises about the characteristics and quality of loans underlying its securities. The risky loans became toxic when housing prices collapsed.

The accord covers mortgage pools with a $174 billion unpaid principal balance.

The distressed bonds, issued by Countrywide Home Loans in 2006 and backed by Alt-A pay option ARMs, were most recently trading at an average of about 60 cents on the dollar in the secondary RMBS market, according to Empirasign.

The case is In re: The Bank of New York Mellon, New York State Supreme Court, New York County, No. 651786/2011.


Reporting by Karen Freifeld; Additional reporting by Alison Frankel and Adam Tempkin; Editing by Eddie Evans and Bob Burgdorfer


Back to July 2012 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:



 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

ALB Law Firm

 

Advocate Legal

 

The True News Network

 

Sutton Law Firm, P.L.L.C.

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Phone: 832-932-3951
Toll Free: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.

 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2013 . - All rights reserved.