Allstate sues Countrywide over toxic investments
NEW YORK (AP) - December 29, 2010 -- Allstate says it has filed a federal lawsuit against Countrywide Financial Corp. over $700 million in toxic mortgage-backed securities the insurer bought in 2007, only to see their value decline rapidly.
The suit targets Countrywide, its former CEO Anthony Mozilo and other executives and Bank of America, which bought the mortgage giant in 2008.
The suit maintains that beginning in 2003, Countrywide abandoned its underwriting standards, misrepresented crucial information about the underlying mortgage loans and concealed material facts from Allstate and other investors.
The insurer says its claims are based on analysis of the loans underlying the mortgage-backed securities, internal Countrywide documents that have been made public, and complaints filed against Countrywide by the regulators, states' attorneys general and other investors.
Bank of America had no immediate comment.
bank of america, lawsuit, business/finance
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