Have There Been Any Lawsuits Against Countrywide Home Loans?

Have There Been Any Lawsuits Against Countrywide Home Loans?

Countrywide Home Loans was sued in a class-action lawsuit under accusations of misleading investors. A settlement was reached on April 17, 2013, in which the parties asserting the claim received $500 million.

This lawsuit arose from Countrywide's involvement in issuing mortgage-backed securities, a type of investment instrument blamed in great part for the subprime mortgage crisis of 2007. While the purpose of mortgage-backed securities is to reduce the investment risk on home mortgages, Countrywide's subprime lending policies led to the default of many of these mortgage loans. Bank of America negotiated the settlement, since it had previously acquired Countrywide Home Loans and its portfolio.