As the last day of hearings on the $8.5 billion Countrywide settlement closed without a conclusion, analysts warned investors’ wait for payouts could be much longer than until November when the trial will resume to hear one remaining key witness.

Closing arguments on whether Bank of America’s Countrywide unit committed fraud against government-sponsored entities selling roughly $1 billion in questionable mortgage loans will be presented in mid-November after the testimony of Georgetown law professor Adam Levitin suggesting the trial could be completed by Nov. 20 or 21, according to a Barclays report.

If the judge reaches a final decision soon after, analysts wrote, investors could receive settlement payouts “sometime in the first half of 2014.”

This theoretically possible outcome, however, will become reality within that timeframe only if the trustee and institutional investors overcome several hurdles.

According to the report, the most significant near-term risk is the objectors’ request to conduct additional discovery on all “factual and legal investigations” and evaluation of claims by BNY Mellon.

“Given the obstacles that BNY Mellon and the institutional investors must overcome,” while it is still possible investors receive the $8.5 billion payout in the first half of 2014, but analysts note this upside scenario could occur “only if the case unfolds favorably for BNY Mellon on multiple fronts over the next several months.”

While the judge might take several months to reach a decision, the biggest risk for investors is a ruling against their objectors leading to a request for an appeal that is denied by the New York Appeals Court.

If the judge ultimately rules against the settlement, analysts note, it will mean new negotiations between B of A and investors, or in a worst case scenario, the megabank can file for Countrywide’s bankruptcy and litigate over “potential for successor liability.”

Both cases “would likely delay the payout by at least several more months,” indicating that the earliest time settlement recoveries could reach investors is in the second half of 2014 or early 2015.

Furthermore, “a side settlement between Bank of America and the objectors” would be a surprise outcome not likely to happen, according to these insiders.

They argue that if B of A can achieve a side settlement with AIG and the FHLBs before the trial concludes, or if key objectors withdraw, “the payout to investors could be substantially accelerated.”

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