Bank of America $60 billion

Bank of America $60 billion, This month is an important one for Bank of America (NYSE: BAC  ) , particularly as it pertains to one of many lawsuits concerning deteriorating mortgage-backed securities and the decaying mortgages that reside therein.

Prior settlement thrown into doubt
The case involves a settlement struck in 2011, for $8.5 billion, between B of A and 22 investors, pursuant to 530 mortgage trusts sold by Countrywide. This settlement is now in question, since some investors came up with evidence that the bank did them wrong by putting its own interests before theirs -- for example, by modifying mortgages contained within the MBSes, then neglecting to buy them back from the investors, as the plaintiffs allege was the agreement between the parties.

Alison Frankel outlines all the painful contortions this suit has undergone since last year, and the next installment will occur on May 30. It is then that New York State Supreme Court Justice Barbara Kapnick will begin hearing arguments regarding whether or not the settlement should be overturned.

This question is based upon whether or not the Bank of New York Mellon (NYSE: BNY  ) , acting as trustee for the investors, agreed to the terms of the settlement in good faith. Under New York's Article 77, the trustee must have acted "reasonably," which gives the judge wide latitude, it seems. How that law is interpreted will decide whether or not the settlement stays -- or goes.

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