Countrywide Gets Homeowners' MBS Fraud Claim Tossed

Law360, New York (August 24, 2011, 10:17 PM EDT) -- A California appeals court on Wednesday tossed a claim brought by homeowners accusing Countrywide Financial Corp. of fraudulently concealing a scheme to sell mortgage-backed securities at inflated values that caused loan recipients' home values to drop when the real estate bubble burst.

A group of 248 homeowners sued the Bank of America Corp.-owned lender in 2009, accusing Countrywide of selling pooled mortgages to investors for more than they were worth. When the scheme collapsed, their properties' values declined, the plaintiffs alleged.

Countrywide objected to the suit,...
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