Just days after news broke that Bank of America (BofA) is facing a new lawsuit from 15 former Countrywide Financial Corp. investors that lost money during the housing collapse comes word that the company is now looking to the government for help shielding itself from further litigation.
BofA is now trying to broker a settlement with state and federal officials to protect the company should any further suits arise over the Countrywide’s mortgage practices, reports the Washington Post. In return, BofA says it will reduce the amount that struggling homeowners owe on their loans.
The Post writes that BofA had proposed these terms as a supplementary deal to a separate, larger agreement the bank is negotiating with the nation’s five largest banks, federal investigators and a coalition of attorneys from all 50 states.
A glut of plaintiffs in the past few years have alleged that Countrywide and its former officials abandoned prudent lending practices and inflated its earnings, among other complaints, all in an effort to drive up market share. The banking behemoth purchased Countrywide in 2008.
Last week, a group of plaintiffs, including BlackRock Inc., T. Rowe Price Group Inc. and TIAA-CREF, sued BofA, claiming that the terms of a recent settlement are unfair. The plaintiffs are seeking class action status, unspecified damages and a jury trial. The group reportedly believes they can recover more money by separately suing BofA.
For more on BofA’s proposed settlements, read the Washington Post.