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Oregon Pursues Case Against Countrywide

Published Updated 2 Min Read

Oregon Treasurer Ted Wheeler and Attorney General John Kroger have pursued legal action against Countrywide Financial in order to recoup nearly $29 million in losses that they say the state’s public retirement fund suffered during the mortgage crisis of year’s past.

According to yesterday’s announcement, state officials explained that the suit was filed on behalf of the Oregon Public Employee Retirement Fund (PERF). The litigation contends that the fund was “induced to invest $200 million into home loans originated by Countrywide” and lost monies “as a result of misrepresentations by Countrywide and its financial underwriters.”

“Oregon is taking a stand against predatory lenders and the financial wreckage they caused families and for investors including Oregonians,” Wheeler said Wednesday. “With this lawsuit, we are attempting to recover losses from lenders that took advantage of innocent families, whose only fault was wanting to participate in the American dream and own a home.”

With the July 14 filing, the Oregon Public Employees’ Retirement System (PERS) joins a pool of state retirement plans that include the lead plaintiff: the Iowa Public Employees’ Retirement System (IPERS). Additionally, partnering in the California federal court suit is the General Board of Pension and Health Benefits for the United Methodist Church and the Orange County Employees’ Retirement System (OCERS).

From 2005 through 2007, the joint lawsuit alleges that Countrywide, which was bought over by Bank of America (BofA) in January for roughly $4 billion, violated securities law by making statements to investors that were “materially false and misleading because they misrepresented and/or failed to disclose information crucial to investors’ ability to accurately assess the risks of their investments.”

At the time, Countrywide was allegedly the largest residential mortgage lender with about $850 million in home loans in the country, the filing states.

In his comments, Kroeger, the state watchdog, explained that this pursuit intends to replete the losses and hold the entities responsible for the current perilous homeowner situation in Oregon.

“Oregon is currently No. 3 nationwide in foreclosures,” Kroger said. “This lawsuit will help hold the responsible companies accountable.”

When contacted today, BofA declined comment.


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