Insurers Sue BofA, Countrywide Over $619M MBS Sale

Law360, New York (April 27, 2011, 8:57 PM EDT) -- Countrywide Financial Corp. and its parent Bank of America Corp. were hit with a suit Wednesday in Ohio for allegedly misrepresenting $619 million in mortgage-backed securities it sold to a group of insurers owned by Western & Southern Financial Group.

The insurers claim that documents the U.S. Securities and Exchange Commission publicly released recently show that Countrywide, which BofA, bought in 2008, knew the securities were backed with subprime loans that were headed for default.

"Western & Southern was told it was buying highly-rated, safe securities...
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