A federal court late Friday approved a $500 million mortgage-backed securities settlement in favors of investors against Countrywide Financial Corp. and other business entities, according to plaintiffs’ counsel.
This is the largest U.S. Countrywide MBS class-action settlement on behalf of investors, according to plaintiffs’ lead counsel Steven Toll of Cohen Milstein Sellers & Toll PLLC.
The U.S. District Court for the Central District of California approved the settlement, bringing to a close a consolidated class-action lawsuit filed in 2010 by multiple retirement funds. The funds had alleged securities violations related to the packaging and sale of MBS.
Plaintiffs had alleged “defective” loans backed the bonds. Ratings agencies had downgraded almost all the bonds to junk status by late 2008. Bank of America purchased Countrywide in 2008. Countrywide’s settlement lacks any admission of wrongdoing.
The settlement resolves Maine State Retirement System et al. v. Countrywide Financial Corp. et al., as well as David H. Luther v. Countrywide Financial Corp. et al. and Western Conference of Teamsters Pension Trust Fund v. Countrywide Financial Corp. et al.