Allstate Sues BofA, Mozilo Over Countrywide Losses

NEW YORK (By Jonathan Stempel) – Allstate Corp has sued Bank of America Corp, its Countrywide lending unit and 17 other defendants for allegedly misrepresenting the risks on more than $700 million of mortgage securities it bought from Count…

NEW YORK (By Jonathan Stempel) – Allstate Corp has sued Bank of America Corp, its Countrywide lending unit and 17 other defendants for allegedly misrepresenting the risks on more than $700 million of mortgage securities it bought from Countrywide.

Allstate, the largest publicly traded U.S. home and auto insurer, alleged it suffered “significant losses” after Countrywide misled it into believing the securities were safe, and the quality of home loans backing them was high.

The lawsuit also names several former Countrywide officials as defendants, including longtime Chief Executive Angelo Mozilo. Countrywide was the largest U.S. mortgage lender before Bank of America bought it in July 2008.

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