A federal judge in California has dismissed all claims brought against ""Bank of America"":http://www.bankofamerica.com by investors who bought mortgage-backed securities (MBS) from Countrywide before BofA purchased the subprime lender in 2008.
The group of pension fund investors had initially sued Bank of America in January 2010 over $352 billion in mortgage bonds put together by Countrywide, alleging that Countrywide had used sub-par underwriting criteria to originate the loans packaged into the securities and then[IMAGE] [COLUMN_BREAK]
misled investors about the quality of the mortgages and the risk associated with them.
After failing to win favor with the judge on the original claims, the investors narrowed their scope last December to encompass $17 million of the mortgage securities in question.
But the online legal news source ""Law360"":http://www.law360.com reports that even after the investors refined their case, U.S. District Judge Mariana Pfaelzer granted Bank of America's request to dismiss the claims because the plaintiffs failed to show that two separate transactions between the bank and Countrywide involving the transfer of assets constituted a de facto merger, shielding the bank from successor liability.
According to Law360, the pension funds still have claims pending against Countrywide and its affiliates, several of the company's former directors, and banks that served as underwriters on the offerings, including Goldman Sachs and Deutsche Bank Securities.
The site reports that all these defendants also have pending motions to dismiss the charges.