Countrywide, BofA Face Derivative Suit Over 'Toxic' Loans

Law360, San Francisco (March 24, 2014, 7:39 PM EDT) -- Countrywide Financial Corp. and Bank of America Corp.'s top brass were hit with a derivative shareholder suit in New York federal court on Friday, seeking to hold Countrywide responsible for a “toxic” high-speed mortgage approval process that could require Bank of America to pay $2.1 billion.

The suit, filed by shareholder Chaile Steinberg on behalf of Bank of America, claims that subsidiary Countrywide's “High Speed Swim Lane,” or HSSL, caused the lender's mortgage defect rate to skyrocket to 40 percent — a fact the company's leaders...
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