NEW YORK —
The suit, filed in federal court in Manhattan, names Countrywide, cofounder and longtime chief executive Angelo Mozilo, and
Allstate maintains that beginning in 2003, Countrywide abandoned its underwriting standards and misrepresented crucial information about the underlying mortgage loans that made up the securities it sold. The company presented the securities as safe investments, the suit alleges.
Bank of America said, “This unfortunately appears to be a situation where a sophisticated investor is looking for someone to blame for a downturn in the economy and losses on an investment it made.’’
Allstate did not specify damages in the suit but said it seeks, at minimum, to reverse the securities purchases and recover its losses. The insurer posted a loss of $1.68 billion for 2008, largely due to investment losses. It turned a profit in 2009 and has positive income in 2010.