Countrywide Is Sued by TIAA-Cref, Investors in Mortgage-Backed Securities
By Jan 24, 2011 5:35 PM ET –
Bank of America Inc.’s Countrywide Financial unit was sued by investors in mortgage-backed securities who alleged a “massive fraud” in a complaint filed today in New York state court.
TIAA-CREF Life Insurance Co., New York Life Insurance Co., and Dexia Holdings Inc. are among about a dozen plaintiff institutional investors in mortgage-backed securities issued by Countrywide’s subsidiaries, according to the complaint.
The investors claim they bought hundreds of millions of dollars of Countrywide mortgage-backed securities from 2005 to 2007 because they wanted conservative, low-risk investments and relied on term sheets, prospectuses and other materials provided by the firm that they say were recklessly or knowingly false, according to the complaint.
“In reality, Countrywide was an enterprise driven by only one purpose — to originate and securitize as many mortgage loans as possible into MBS to generate profits for the Countrywide defendants without regard to the investors that relied on the critical, false information provided to them with respect to the related certificates,” according to the complaint.
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