Judge Approves $500 Mln Bank Of America Mortgage Settlement

(RTTNews) - Bank of America Corp.'s (BAC) Countrywide unit won final approval of $500 million class-action settlement with investors, who claim they were misled by its Countrywide unit into buying risky mortgage-backed securities ahead of the financial crisis.

Judge Mariana Pfaelzer of the U.S. District Court for the Central District of California said that the deal was "fair, reasonable, and adequate."

"An immediate cash payout that avoids the risks and expenses associated with bankruptcy, protracted litigation, appellate review, and several legal challenges militates in favor of final approval," Pfaelzer stated.

The deal resolves several separate lawsuits against Countrywide that alleged the firm misled investors in offering documents about the quality of the home loans that were pooled for the securities.

Thirty-seven entities objected to the deal, included the Federal Deposit Insurance Corporation, as receiver for 19 banks. The FDIC filed an objection in October on the basis that the deal wasn't fair and adequate.