RMBS Settlement

FDIC Settles RMBS Litigation for $190 Million with U.S. Financial Institutions

On May 26, 2016, the FDIC reached a $190 million settlement of RMBS claims against eight financial institutions, including Barclays Capital Inc.; Deutsche Bank Securities Inc.; Goldman, Sachs & Co; RBS Securities Inc.; and UBS Securities LLC. The settlement resolves six separate suits brought in 2011 and 2012 in California and Alabama alleging misrepresentations within the defendant underwriters’ RMBS offering documents.  The FDIC, as a receiver, will distribute the settlement funds among five failed bank receiverships.  FDIC Settlement Agreement.

Bank of America $8.5 Billion RMBS Settlement Proceeding to Stay in Federal Court

Judge William H. Pauley III of the Southern District of New York ruled on October 19 that federal court is the proper forum for the proceeding brought by Bank of New York Mellon Corp., as Trustee, seeking court approval of the $8.5 billion settlement between Bank of America Corp. and holders of Countrywide mortgage-backed securities. BONY Mellon commenced the proceeding in state court in June 2011. A number of investor groups, and the attorneys general of two states, intervened to oppose the settlement, and one of the objecting investor groups – the “Walnut Place” investors – then removed the action to federal court. Judge Pauley denied BONY Mellon’s motion to remand to state court, holding that the case was properly removed as a “mass action” under the Class Action Fairness Act. Order.