Allstate sues BofA, others over Countrywide losses

NEW YORK (Reuters) – Allstate Corp has sued Bank of America Corp and 18 other defendants over losses it said it suffered on more than $700 million of mortgage debt it bought from Countrywide Financial Corp.

In a complaint filed Monday in Manhattan federal court, Allstate, the largest publicly traded U.S. home and auto insurer, alleged that Countrywide misled it into believing the securities it bought were safe, and that the quality of residential home loans backing them was high.

“Defendants knew the loans offloaded onto Allstate were a toxic mix of loans given to borrowers that could not afford the properties, and thus were highly likely to default,” the complaint said. Allstate suffered “significant losses” as a result, the complaint said.

Among the defendants are several former Countrywide officials, including long-time Chief Executive Angelo Mozilo.

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Complaint to follow…

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Allstate Insurance Co et al v. Countrywide Financial Corp