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 Countrywide, 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.

A spokesman for former Countrywide CEO Angelo Mozilo didn't immediately return messages.

Published: Thu, Jan 27, 2011

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