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

Posted by Patrick Barnard on June 17, 2014 No Comments
Categories : Residential Mortgage

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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