The legal saga of Bank of America Corp.'s $8.5 billion mortgage debt settlement took another twist as a U.S. appeals court agreed to resolve the dispute over whether this case should be sent back to a New York State court for approval.
Reuters reports that the 2nd U.S. Circuit Court of Appeals in New York announced that it will rule within 60 days on whether the U.S. District Court acted properly in October by removing the case from the state court. In a two-page order, the 2nd Circuit requested that the parties involved in the settlement controversy address a number of pertinent issues, including whether the settlement could be defined as a ‘mass action.’
U.S. District Judge William Pauley based his October decision on the argument that the settlement encompassed ‘paramount federal interests’ related to the national economy and financial markets. The Bank of America settlement, which was announced in June, is based on legal liability stemming from claims by investors in 530 mortgage securitization trusts against Countrywide Financial Corp., which the bank purchased in 2008.