Allstate Sues Countrywide Mozilo Over Toxic Residential Mortgage-Backed Securities

DECEMBER 28, 2010, 8:30 P.M. ET.

Wall Street Journal reports the full story here.

Allstate Sues Countrywide Over Toxic Investments

BY DAVID BENOIT NEW YORK—Insurance company Allstate Corp. sued mortgage-originator Countrywide Financial Corp., now a part of Bank of America Corp., over $700 million in residential mortgage-backed securities that the insurer had invested in. The suit also names Countrywide executives as defendants, including Chairman and Chief Executive Angelo Mozilo, who agreed in October to pay $67.5 million in penalties to settle civil-fraud and insider-trading charges from the housing crisis. Allstate’s suit, filed Monday in Manhattan federal court, contains similar allegations other investors have raised with mortgage creators, namely that lax underwriting standards are to blame …

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