Bank of America will try today to persuade a California state court judge in San Francisco to dismiss yet another suit that seeks to make it repurchase $19 billion in mortgage-backed securities. If the bank loses out, Bloomberg News said, it may open the floodgates for investors to be able to access internal bank files and correspondence about the loans for pre-trial evidence.
This marks the latest in a flood of suits against Bank of America and other underwriters such as Goldman Sachs to force the buyback of downgraded mortgage securities, according to Bloomberg News. So far, investors have defeated efforts by the banks to have cases dismissed before trial.
In several rulings over the past few months, a Washington state judge has berated banks for citing faulty data from appraisers or expired statutes of limitation to avoid Federal Home Loan Bank of Seattle’s claims.
“At each milestone it puts additional pressure on the defendant to settle,” said Isaac Gradman, an attorney and managing member of a mortgage-backed securities consulting firm in California. [Bloomberg]