Investors and Countrywide Agree to Landmark $500 Million Settlement
Iowa Public Employees’ Retirement System Led Federal Court Litigation in MBS Case
(WASHINGTON, D.C.) Plaintiffs in the landmark mortgage-backed securities (MBS) class action litigation against Countrywide Financial Corporation and others, led by Lead Plaintiff, the Iowa Public Employees’ Retirement System (IPERS), have agreed to a $500 million settlement, according to plaintiffs’ Lead Counsel Steven J. Toll of Cohen Milstein Sellers & Toll PLLC. It is the nation’s largest MBS-federal securities class action settlement.
If approved by the U.S. District Court in the Central District of California, the settlement will bring to a close the consolidated class action lawsuit brought in 2010 by multiple retirement funds against Countrywide and other defendants for securities violations involving the packaging and sale of MBS. Bank of America acquired Countrywide in 2008.
The plaintiffs charge that they and other investors were sold billions of dollars worth of MBS certificates backed primarily with defective Countrywide-originated loans. By late 2008, virtually all of those certificates were downgraded to junk bond status.
“We are pleased that Countrywide elected to negotiate a settlement with investors who were harmed by its securitization practices,” said Toll, whose firm was named Lead Counsel in the consolidated class action in May 2010 by the presiding U.S. District Court Judge Mariana Pfaelzer. “This settlement will bring closure to investors who were misled about the quality of the mortgages that Countrywide securitized.”
Class representatives in the settlement of the 429 Countrywide-sponsored offerings are the Iowa Public Employees’ Retirement System (IPERS), which was appointed lead plaintiff by the U.S. District Court, Central District of California, in May 2010; as well as the Oregon Public Employees’ Retirement System; the Orange County Employees’ Retirement System; and the General Board of Pension and Health Benefits of the United Methodist Church, who were appointed additional class representatives in November 2011.
In addition to Toll, counsel for plaintiffs in Maine State Retirement System et al., v. Countrywide Financial Corp. et al. include Julie Goldsmith Reiser and Christopher Lometti of Cohen Milstein Sellers & Toll PLLC. Also settling are the David H. Luther v. Countrywide Financial Corp, et., al., and Western Conference of Teamsters Pension Trust Fund v. Countrywide Financial Corp. et. al. actions.
For more information about the case, visit http://www.cohenmilstein.com/cases/224/countrywide-mortgage-backed-securities-mbs-litigation.