Countrywide to Pay $600 Million to Settle Lawsuits

USA Today
August 3, 2010
Armour, Stephanie

Countrywide Financial has agreed to settle shareholder litigation for $600 million and has received preliminary approval from a U.S. District judge in Los Angeles, with a final approval expected in November. The lawsuits accuse Countrywide of misleading investors by failing to disclose the risks associated with loans made under lax lending standards, and the settlement -- which also entails the accounting firm KPMG paying $24 million -- is the biggest one related to the collapse of the subprime mortgage market. Countrywide also has been sued by a number of states on behalf of the firm's borrowers. Bank of America, which acquired the lender two years ago, already has settled other lawsuits involving the company. In 2008, it reached an agreement with state attorneys general to modify distressed home loans for up to as many as 400,000 borrowers through $8.4 billion in interest rate and principal reductions; and just this past June, it agreed to pay $108 million to settle Federal Trade Commission charges that Countrywide imposed exorbitant fees to borrowers on the brink of foreclosure.
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