New York Attorney General Eric Schneiderman is trying to stick a spoke in the wheel of the $8.5 billion mortgage-backed securities settlement that Bank of America (BAC: 8.83 -7.44%) reached with The Bank of New York Mellon (BK: 23.72 -3.77%) earlier this summer.
Schneiderman filed a motion with a New York state court Thursday, requesting his office receive permission to intervene in all legal actions involving the proposed multibillion-dollar settlement that was cut to resolve issues stemming from the sale of toxic mortgage-backed securities. BofA struck the deal with BNY Mellon in June.
The Bank of New York Mellon became a key party in the settlement as official trustee for 530 MBS trusts that had a combined principal balance of $424 billion in Countrywide Financial loans.
In legal filings, Schneiderman said he believes the settlement ignores the interests of investors who had securities in the MBS pool and, without his involvement, fears the settlement will indemnify affected parties from future litigation, bar investors from seeking the full value of their losses and intervening in current and future legal proceedings that the AG's office is involved in.
"BNYM cannot obtain the broad relief it seeks in this proceeding unless the interests of the trusts’ beneficiaries are adequately spoken for and protected," the AG's office said in court filings.
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