Investors sue BoA after predatory lending case
Investors demand $US80bn from BoA's Countrywide following predatory lending case settlement
A group of bond investors has sued Bank of America (BoA)-owned Countrywide
Financial, demanding Countrywide purchase every mortgage loan for which it
agrees to reduce payments under a predatory lending settlement deal.
Under an agreement in October with 15 state attorneys general, Countrywide,
USA’s biggest mortgage lender before BoA bought it for $2.5bn, will modify
mortgages for about 400,000 homeowners to settle allegations of predatory
Lawyers for the plaintiffs claim Countrywide and its parent would be liable
to pay hundreds of trusts a total of $US80bn for the loans it modifies.
‘Countrywide believes that plaintiffs’ lawsuit represents an unlawful effort
to assert rights of the trusts,’ BoA said. ‘Accordingly, Countrywide intends to
pursue plaintiffs for any and all remedies available to it, including the
recovery of its costs incurred in having to defend this improper action.’