The settlement will end the BofA mortgage securities woes, which have been chasing the bank for a long time with legal complication, and also affected the bank performance, reports Financial Times.
Boston-based hedge fund Baupost’s advocate commented that the firm wants to "withdraw as an intervener in this proceeding" in a letter to Barbara Kapnick, the judge at the New York Supreme Court, who is hearing the case.
Baupost previously opposed the settlement of the deal, and after its exit AIG, the underwriter remained the last important opponent to the deal.
Kathy Patrick, a partner at Gibbs & Bruns, who represented investors in reaching on the settlement was quoted by the Financial Times as saying that "It’s obviously a very welcome and important development from our perspective."
She told to FT that she hoped remaining holdouts would "take this opportunity to take a second look" at the "enormously valuable" deal on offer.
The agreement which has to be inked between BofA and Bank of New York Mellon, the trustee for a group of mortgage bonds also got the backing of key investors BlackRock and MetLife.
Investors who lost their money due to purchasing of BofA mortgage-backed securities have been demanding compensation for those that contained soured loans that breached underwriting guidelines.
BofA misdeeds committed over the past few years has also taken a heavy toll on its earning, which is apparent from Bank’s second-quarter earnings presentation, when BofA disclosed that claims had jumped from both private mortgage investors and Fannie Mae and Freddie Mac, the government-backed mortgage companies.
