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Federal Home Loan banks drop objections to BofA settlement of Countrywide

October 31
3:40 AM 2013

The Federal Home Loan Banks of Boston, Chicago and Indianapolis withdrew their objection to the USD 8.5 billion settlement of Bank of America over Countrywide mortgage securities in a New York lawsuit. Lawyers of the three Federal Home Loan Banks told New York Supreme Court Judge Barbara Kapnick that they had dropped their opposition to the agreement.

The settlement was between Bank of New York Mellon Corp and Bank of America's Countrywide unit. Bank of New York Mellon was the trustee for Countrywide's securities. The agreement resolved the issue that Countrywide breached a contract to buy back delinquent mortgages. The mortgages were gathered together to comprise mortgage-backed securities.

In a related development, two funds also withdrew their initial objection to BofA's settlement yesterday through their lawyers. In August, Cranberry Park Llc and Cranberry Park Llc II said they owned Countrywide securities. The funds had claimed that the securities held an original principal value of over USD 1 billion.

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