Bank of America has agreed to settle nationwide lawsuits including a class action led by the $24.9 billion Iowa Public Employees' Retirement System, Des Moines, for $500 million, one of the largest mortgage-backed securities settlement ever under federal law.
In 2010, a number of pension funds sued Countrywide Financial Corp. — acquired by Bank of America in 2008 — for securities violations involving the packaging and sale of billions of dollars worth of mortgage-backed securities.
The Oregon Public Employees Retirement Fund, a named plaintiff in the class-action lawsuit, invested $200 million in home loans originated by Countrywide and ended up losing $29 million as a result of misrepresentations by Countrywide and its financial underwriters, according to the complaint.
Other named plaintiffs include the $10.4 billion Orange County Employees Retirement System, Santa Ana, Calif. and the the $19.1 billion General Board of Pension and Health Benefits of the United Methodist Church, Glenview, Ill.
The settlement, reached April 18, is now waiting approval from Judge Mariana Pfaelzer in the U.S. District Court in Los Angeles.