October 1, 2014 / 6:04 PM / 5 years ago

Opponent of Bank of America $8.5 billion mortgage deal drops out

A Bank Of America sign is pictured in the Manhattan borough of New York August 21, 2014. REUTERS/Carlo Allegri

NEW YORK (Reuters) - A key opponent of Bank of America Corp’s proposed $8.5 billion settlement with investors in mortgage-backed securities has dropped its objections, marking another step forward for the deal to receive final court approval.

Opponents still include the Chicago police pension fund, which will argue the case on appeal later this month.

The Triaxx entities filed a proposed order to withdraw from the case in New York state court on Tuesday. The entities are collateralized debt obligations (CDOs) from 2006 and 2007.

American International Group Inc, which led objectors to the settlement in a three-year legal battle, in July settled its disputes with Bank of America and dropped out.

Bank of America struck the deal in 2011 with 22 institutional investors in toxic securities issued by Countrywide Financial Corp, the mortgage lender the bank acquired at the height of the financial crisis. Those investors include BlackRock Inc,Allianz SE’s Pimco and Metlife Inc.

A lawyer for Triaxx raised the only issue a New York judge withheld from her overall approval of the accord in January.

The judge found Bank of New York Mellon, the trustee overseeing the securities, should not have settled claims relating to certain modified mortgages without investigating their potential worth.

New York attorney John Moon, who represents Triaxx, declined to comment, as did Texas attorney Kathy Patrick, who represents the institutional investors who struck the deal. A spokesman for Bank of New York Mellon also declined comment. A Bank of America spokesman declined to comment.

The case is In re: The Bank of New York Mellon, New York State Supreme Court, New York County, No.651786/2011.

Reporting By Karen Freifeld; editing by Andrew Hay

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