Allstate Sues Countrywide Over $700 Million Investment in Mortgage Bonds

(BLOOMBERG) — Allstate Corp. sued Bank of America Corp. and its Countrywide mortgage unit over $700 million in residential mortgage-backed securities the insurer purchased, claiming Countrywide misrepresented the investments.

The suit, which seeks unspecified damages, alleges fraud, negligent misrepresentation and violation of U.S. securities laws.

Countrywide misled investors about its underwriting guidelines, the rate at which mortgaged properties were owner- occupied, the value of the mortgaged homes and the widespread use of exceptions to the underwriting process to circumvent guidelines, Allstate said in the complaint.

via Allstate Sues Countrywide Over $700 Million Investment in Mortgage Bonds – Bloomberg.

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