UBS Group has sued Bank of America BAC for $200 million, the complaint was brought against the latter in a Manhattan state court in New York, alleging that it declined to pay the legal fees related to high mortgages that were given out before to the 2008 financial crisis. The mortgages from Countrywide Financial, which Bank of America purchased in 2008, were bundled into securities by the Swiss bank.
The bank said that Countrywide had given its consent to hold it harmless from any allegations of inappropriate or fraudulent underwriting of the mortgages. UBS Group settled Countrywide loan-related disputes in 2013 by giving the US Federal Housing Finance Agency $885 million.
Additionally, the Federal Home Loan Bank of San Francisco and the firm came to a private settlement in 2016 over the same loans. UBS said that BAC refused to fulfill its indemnity commitments in spite of lengthy correspondence with Bank of America about indemnification, which amounted to around $53 million in legal fees.
Bank of America Lawsuit Settlement 2024
Following the filing of the case against Bank of America, the UBS Group grabbed headlines. The purpose of the case was to uphold the terms of the mortgages that the Bank had granted in 2008. In response to the problems arising from the high mortgages, the bank has chosen to pay the people a total of $200 million. Although it hasn’t been announced, the Bank of America Lawsuit Settlement 2024 Payment Date may come as soon as 2024 ends.
In a $200 million lawsuit, UBS claimed that Bank of America, the country’s second-biggest bank, had neglected to pay its legal fees for high mortgages that had been provided prior to the 2008 global financial crisis. According to the Swiss bank, Countrywide agreed to protect it against accusations that the mortgages were illegally or improperly underwritten. In 2008, Bank of America purchased mortgages from Countrywide Financial, which the Swiss bank packaged into securities.
Bank of America BAC Lawsuit Claim 2024 Details
| Bank name | Bank of America |
| Country Name | America |
| Lawsuit for | Mortgages |
| Settlement Payment Amount | $200 million |
| Payment Date | Updating Soon |
Why did UBS sue Bank of America
UBS is blaming Bank of America, saying it deserves to pay the legal fees associated with the high mortgages that Countrywide Financial a business that Bank of America acquired in 2008 sold. UBS is suing Bank of America for indemnity because it packaged these mortgages into securities. In 2013 and 2016, the Swiss bank resolved significant lawsuits already.
With this litigation, there is still disagreement over who should pay the financial consequences, adding to the lengthy list of legal disputes resulting from the 2008 financial crisis. UBS charges Bank of America with breach of contract for mortgages granted by Countrywide Financial, which Bank of America acquired in 2008.
UBS, which subsequently had financial difficulties as a result of poorly structured or fraudulent loans, packaged these mortgages into securities. In the action, which was submitted to the Supreme Court of New York State, it is alleged that Countrywide had pledged to shield UBS from lawsuits stemming from these problematic mortgages. The latest legal action, according to UBS, stems from Bank of America’s alleged failure to keep this pledge.
Who is eligible for Bank of America Lawsuit 2024?
- Bank customers living in the United States.
- Those who have funded the loans
- The ones who paid high mortgage rates.
How did UBS come up with the $200 million figure?
For UBS, the previously stated mortgage-backed securities have already had a significant negative financial impact. The bank and the US Federal Housing Finance Agency reached a $885 million settlement in 2013. In addition, UBS and the Federal Home Loan Bank of San Francisco reached a settlement in 2016 for a sum that was not revealed.
Loans from Countrywide were a factor in both settlements. UBS claims that the second-largest U.S. bank declined to fulfill its duties, even after lengthy negotiations over compensation that included paying around $53 million in legal fees, with Bank of America. On how it arrived at the $200 million number, UBS did not provide any more details.
The case highlights how the 2008 financial crisis continues to have legal ramifications, especially with relation to residential mortgage-backed securities but what makes UBS’s action special is that it doesn’t directly seek culpability for the security’s lower value; instead, it wants compensation for settlements associated with these securities.
What is the role of Countrywide?
By providing subprime loans, Countrywide rose to prominence as the biggest mortgage lender in the United States, causing the housing bubble to collapse and igniting the 2008 financial crisis. In 2008, BAC bought Countrywide. The bank eventually spent tens of billions of dollars on litigation fees and other costs related to the purchase of Countrywide.
With cheap upfront payments and little paperwork required, it catered mostly to subprime customers. The 2008 housing bubble burst, sparking a financial crisis and recession, in large part because of these tactics. Huge expenses were incurred in 2008 when Bank of America acquired Countrywide for $2.5 billion, the bank has had to pay huge amount in legal fees and other costs.
Jaxon Elias is a writer, poet, and finance expert. He graduated from the Craig School of Business in 2014 and later completed the “Leading with Finance” course from Harvard University Online. Additionally, he has worked as a freelancer for various media houses