FDIC Challenges BofA's $500M MBS Settlement

Law360, New York (October 8, 2013, 3:04 PM EDT) -- The Federal Deposit Insurance Corp. told a California federal court Monday that Bank of America Corp.'s $500 million settlement in a suit over its underwriting standards for mortgage-backed securities should be thrown out because the proposed class representatives have a conflict of interest.

According to the FDIC's objection, the named plaintiffs and class counsel had a conflict of interest in negotiating and accepting the proposed settlement, under which they would receive “substantial payments at the expense of the rest of the class.”

The settlement, which was...
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