SALEM, Ore. (Legal Newsline) - Oregon Attorney General Ellen Rosenblum and Treasurer Ted Wheeler announced a $500 million multi-state settlement Wednesday with Bank of America to resolve a lawsuit against Countrywide Financial Corp.
Countrywide allegedly misled investors into buying risky mortgage-backed securities before the worldwide market crash in the 2000s. Bank of America acquired Countrywide in 2008.
The allegedly deceptive investments cost Oregonians after the Oregon pension fund invested $200 million into home loans originated by Countrywide. The fund lost $29 million.
Oregon joined the Maine pension fund on the lawsuit, which was filed in California. The lawsuit alleged that Countrywide violated securities law by making materially false and misleading statements to investors, falsely claimed that its mortgage loans met accepted underwriting standards and falsely claimed that its appraisals met acceptable standards to ensure the property value served as adequate collateral for the mortgage.
"The entire country paid a dear price for Countrywide's and much of the financial industry's aggressive risk-taking," Rosenblum said. "This settlement is one small step toward obtaining some justice for the thousands of lives disrupted by the housing bust and economic crash."
A standard recovery in securities class action cases is 10 cents on the dollar.
It may take months to know Oregon's exact share of the national $500 million settlement.