As you likely are aware, this past Wednesday (June 29th) Bank of America (BofA) announced an agreement to resolve nearly all of its repurchase and servicing exposure for legacy Countrywide-issued first-lien residential mortgage-backed securitization (RMBS). The proposed settlement includes a cash payment of $8.5 billion to the covered trusts to be made after final court approval of the settlement. The trusts involved in the deal had an original principal balance of approximately $424 billion and total current unpaid principal balance of approximately $221 billion. If approved, the settlement would result in an approximate 2% recovery on original principal balance and an approximate 4% recovery on outstanding principal balance.

BofA’s settlement is with The Bank of New York Mellon (BNY Mellon), which acts as trustee for the relevant RMBS trusts. Currently, a group of 22 investors is supporting the settlement. The deal struck covers 525 Countrywide first-lien RMBS trusts and five Countrywide second-lien RMBS trusts with mortgage loans principally originated between 2004 and 2008.

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