WSJ reports the co's decision to embark on an $8.4 billion home-loan-modification program to settle charges brought by state attorneys general against Countrywide Financial Corp. was hailed as a milestone when the deal was announced this fall. But apparently nobody talked to one group that will shoulder much of the settlement's costs: investors who hold securities backed by Countrywide mortgages. Now, some of those investors are crying foul... Bank of America said it owns about 12% of the roughly 400,000 loans at issue in the settlement and can modify another 75% based on the "delegated authority" provided in its contracts with investors. Bank of America didn't seek investor approval before agreeing to the settlement "because the design of the program was based in large part on the delegated authority" in the contracts. But some investors believe they should have been contacted first. "Our view is that Countrywide Financial made this determination without consulting with a representative group of investors," said Ralph Daloisio, managing director at Natixis, which owns securities backed by Countrywide loans. He agreed, though, that if done right, loan modifications can benefit investors. Other investors said Bank of America is moving much of the cost of the settlement to investors when it should be paying those costs itself. These investors said that they don't oppose modifying loans when it will increase investor returns while keeping borrowers in their homes. But they said that many of these loans violated representations and warranties made when the mortgages were packaged into securities. As a result, they said, Bank of America should repurchase the loans before modifying them.