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End in Sight for Countrywide Saga as IRS Approves Settlement

The Internal Revenue Service has stamped an approval on Bank of America Corp.’s $8.5 billion settlement tied to bad mortgages sold by its Countrywide unit in the run-up to the financial crisis, possibly setting a standard for agreements with other lenders.

A notice posted on the settlement’s website and dated Oct. 13, sets into motion a payout timeline for 530 mortgage-backed securities served by Bank of New York Mellon as trustee, more than four years after the agreement was announced and nearly six months after a New York court approved the payments. Cash could begin flowing to investors early next year.

The accord was delayed by bondholders who claimed Bank of New York Mellon had acted against their interests in agreeing to the deal. A state appellate court ruled that there was no indication the trustee had acted improperly, and that decision along with the...


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