By Andrew Longstreth and Joe Rauch
NEW YORK/CHARLOTTE, North Carolina (Reuters) - New York's attorney general will oppose Bank of America Corp's $8.5 billion settlement over repurchasing toxic mortgage loans, joining a growing number of unhappy mortgage bond buyers now fighting the pact reached with some of the largest institutional investors in the country.
In court papers filed late Thursday, New York Attorney General Eric Schneiderman sought to intervene in order to "protect the marketplace and the interests of New York investors, the vast majority of whom otherwise are not present before the Court in this proceeding."
In late June, BofA settled an eight-month dispute with outside investors who bought Countrywide Financial Corp mortgage bonds.
The investors -- including Pacific Investment Management Co, or PIMCO, and BlackRock Inc -- requested the bank repurchase toxic home loans that comprised a series of mortgage-backed securities.
BofA, the investors and securities trustee Bank of New York Mellon agreed to an $8.5 billion settlement that applies to all investors in nearly all Countrywide Financial-created mortgage bonds, but the deal must be approved by a New York court.
The attorney general said in a filing the accord may interfere with his ability to pursue claims against the banks involved, and claims that BofA and Bank of New York may have violated their fiduciary duties in reaching the agreement.
Bank of America and Bank of New York spokesmen 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 Andrew Longstreth; Editing by Lisa Shumaker, Bernard Orr)