On January 15, 2015, the Federal Home Loan Bank of San Francisco (FHLB) agreed to a $459 million settlement with various banks stemming from the sales of billions of dollars of RMBS. FHLB originally filed the claims in the Superior Court of California, County of San Francisco in 2010 against Bank of America Corp., Credit Suisse Securities (USA) LLC, Countrywide Financial Inc., Deutsche Bank Securities, Inc. and other banks concerning 229 RMBS transactions. FHLB alleged causes of action for violation of the Securities Act of 1933 and the California Corporate Securities Act as a result of dealers allegedly concealing information and lying about the quality of RMBS sold to FHLB. It is unclear which banks are involved in the settlement.
Countrywide Financial
$193 Million RMBS Suit Against Countrywide Dismissed as Untimely
On January 10, Judge Mariana R. Pfaelzer of the United States District Court for the Central District of California dismissed a $193 million suit brought by mutual fund Asset Management Fund against several Bank of America and several related entities, including Merrill Lynch and Countrywide Financial. The case initially was brought in New York Supreme Court and was removed to federal court and later transferred to be part of the Countrywide Multi-District Litigation. The plaintiffs brought claims for common law fraud, fraudulent concealment, negligent misrepresentation, and aiding and abetting the fraud of others. The court held that the suit, alleging misrepresentations regarding the underlying mortgage loans including compliance with underwriting rate of owner occupancy, ratio of LTV, and transfer of title, was untimely under all of the statutes of limitations that could apply. The court granted Asset Management Fund leave to replead as to the $10 million purchase of RMBS it allegedly made after March 1, 2007. Decision.
Bank of America Settles Syncora RMBS Action for $375 Million
On July 17, Bank of America agreed to settle a case brought in New York state court by insurer Syncora Guarantee for $375 million. The settlement also includes a transfer of assets from Syncora to Bank of America subsidiaries and a corresponding transfer of preferred shares, surplus notes, and other securities from Bank of America subsidiaries to Syncora. Syncora filed suit against Bank of America in 2009, alleging that Countrywide Financial misrepresented the quality of mortgages underlying securities that Syncora insured. Press Release.