Judge approves $500m BofA mortgage deal A US judge approved a $500m settlement between Bank of America and investors, including retirement funds, who claim they were misled by its Countrywide unit into buying risky mortgage-backed securities ahead of the financial crisis. The settlement - which centres on the packaging and sale of securities - resolves claims on between 65 and 70 per cent of Bank of America's company-wide exposure for mortgage-backed securities litigation, according to the bank. In court filings, the investors said the prospectuses and related documentation on 429 mortgage-backed securities offerings contained false or misleading statements, violating the Securities Act. The investors included Dubai's Mashreq Bank and pubic and union pension funds from Maine to Vermont. Approval of the settlement will provide some comfort to shareholders of the bank that it is chipping away at a number of mortgage-backed securities related legal cases stemming from the subprime mortgage boom and bust. In this settlement, Countrywide was under the spotlight for its origination practices between 2004 and 2007, before its acquisition by Bank of America, which took place in 2008. The complaint, which was originally filed six years ago, marked one of the earliest mortgage-backed securities cases stemming from the financial crisis. Objectors to the $500m settlement included the Federal Deposit Insurance Corporation, as receiver for 19 banks, which filed an objection in October on the basis that it was neither fair nor adequate. California Judge Mariana Pfaelzer rejected the objections: "The Court has carefully considered and rejected each of the objectors" arguments - presented in written submissions and at the fairness hearing - as ultimately lacking in fact and law." "Given the risk and uncertainty of continued litigation in the hopes of obtaining a larger recovery, the proposed settlement amount weighs in favour of final approval," she added. The bank also hopes to finalise an $8.5bn settlement with 22 investors over soured mortgage bonds. New York State Supreme Court Judge Barbara Kapnick is set to rule on whether to approve that settlement where AIG is the main objector. Separately, at a court in Manhattan on Thursday, a judge heard arguments over the size of a penalty BofA should pay in a case dubbed the "Hustle," which centred on a mortgage lending practice at Countrywide called the "High Speed Swim Lane." A jury had earlier found BofA liable for fraud for selling defective mortgages.