Investors Allege Massive Fraud By Countrywide

NEW YORK (AP) — A lawsuit alleges Countrywide Financial and two of its former executives misled institutional investors who bought mortgage-related investments that they claim were portrayed as low-risk.

The lawsuit was filed Monday in New York State Supreme Court by investors who bought hundreds of millions of dollars in Countrywide’s mortgage-backed securities from 2005 to 2007, before the housing market went bust. The list of a dozen plaintiffs includes New York Life Insurance and TIAA-CREF Life Insurance.

The complaint names based Countrywide, which was based in Calabasas, various subsidiaries, two former company executives, and Bank of America, which bought Countrywide in 2008.

A Bank of America spokeswoman says it appears large, sophisticated investors are looking to blame someone for losses caused largely by the recession.

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)


More From CBS Los Angeles

KNX 1070 Newsradio

Listen Live