Appeals Court Gives Investors Green Light To Sue Merrill Lynch Over Faulty Mortgages

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.


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