Bank of America story updated to include reported settlement with MBIA and updated share price action.NEW YORK ( TheStreet) -- Bank of America ( BAC) is close to getting a big monkey off its back related to its liability for mortgage backed securities (MBS) as several objectors to a key $8.5 billion settlement have dropped the opposition to the deal. Bank of America is also reported to have reached a deal with monoline bond insurer MBIA ( MBI) to settle an extended legal battle also tied to mortgage backed securities liability. The news gave Bank of America shares a boost on Monday. In mid-afternoon trading Bank of America shares were up by 4.17% to $12.75, outpacing JPMorgan Chase ( JPM), Wells Fargo ( WFC), Goldman Sachs ( GS) and Morgan Stanley ( MS) all of which were also higher. The proposed $8.5 billion settlement between Bank of America and numerous large institutions, including BlackRock Inc. ( BLK), Goldman and Pimco was reached in 2011. The institutions bought bonds that contained mortgages underwritten by Countrywide Financial that were fraudulent or otherwise did not live up to the terms originally promised. Bank of America bought Countrywide in 2008, saddling it with tens of billions of dollars worth of mortgage-related liability. Several parties objected to the $8.5 billion deal, however, which would require Bank of America to pay out less than 10 cents on the dollar for bonds it sold. Last week, however, attorneys general for New York and Delaware dropped their objections, as did the Federal Housing Finance Authority and the Federal Home Loan Bank of San Francisco among others. The news was a "significant positive" for the bank, JPMorgan analyst Vivek Juneja wrote in a report published Monday. "This reduces some of the risk as the Attorneys General have been very vocal in their objection to the settlement. This change also implies that the AGs believe BAC has a reasonable chance at receiving Court approval for the settlement, although the Attorneys General did not explicitly approve of the settlement," Juneja wrote. One major objector that remains for Bank of America is AIG ( AIG), which argued in a legal brief Friday that the deal "is a pennies-on-the-dollar bargain for BofA that woefully under compensates certificate holders." In an interview Friday before the Attorneys Generals dropped their objections but in response to other objectors dropping out, FBR Capital Markets analyst Paul Miller said he did not expect even the approval of the $8.5 billion settlement would result in anything more than a short-lived rally in Bank of America shares. He argued Bank of America has done a good job convincing investors its legal woes tied to mortgages are behind it. The bigger challenge now for Bank of America is to show sustained revenue growth, something it is still far from accomplishing, Miller says. Miller on Friday said the $8.5 billion settlement could still be thrown out by a judge -- an event that would cause a drastic selloff in Bank of America shares as it would possibly lead to billions more in mortgage-related liability.