Bank of America Proposition Returned to New York State Court

Monday the 2nd U.S. Circuit Court of Appeals ruled that Bank Of America's

$8.5 billion settlement offer with investors in mortgage-backed securities is to be returned to New York state court for review. The ruling reverses a decision made by U.S. District Judge William H. Pauley III that took the case to federal court from state court. This is a victory for Bank of America, who is searching for compliance to settle claims by investors in the 530 mortgage securitization trusts with $174 billion of unpaid principal. Other banks have seen the settlement as a template to address investors claims who purchased high risk pools of mortgages before the housing market crumbled.