The infamous company, now owned by Bank of America, was accused of “massive fraud” by plaintiffs such as TIAA-CREF, Dexia Holdings, and New York Life Insurance, which invested in Countrywide mortgage-backed securities (MBS) between 2005 and 2007.
They claim Countrywide misled them on the quality of the underlying mortgages via term sheets, prospectuses and other materials that were “recklessly or knowingly false.”
Apparently these insurance companies invested in the Countrywide MBS because they wanted “conservative, low-risk investments.”
Seems like a bit of a stretch given they probably came with quite a stellar return compared to other more traditional investments.
It’s not to say Countrywide didn’t take part in shoddy dealings that eventually led up to the mortgage crisis (they didn’t seem to decline ANY loans), it just seems a bit amusing that these companies suing them were blindsided.
And so the lawsuits have come, one after the other.
The suit names more than 20 defendants, including former Countrywide Chief Executive Officer Angelo Mozilo and other former execs.