An appeals court in New York has ruled that two trusts administering mortgages on behalf of investors can proceed with a lawsuit against Bank of America Corp.'s Merrill Lynch unit over faulty mortgage-backed securities.
As per a Bloomberg News report, the trusts are demanding that Bank of America buy back the faulty loans, which have a total combined value of about $1.1 billion, alleging that the quality of the loans was misrepresented at the time the securities were purchased.
The approximately 6,000 mortgages were packaged into securities by now-defunct third-party loan originator ResMAE Mortgage Corp., according to the report.
The ruling in effect upholds a September 2013 ruling by an appellate court in Manhattan that denied Bank of America's motion to dismiss the suit.
For more, check out the Bloomberg News report.