LOS ANGELES - Bank of America Corp.’s Countrywide unit and insurer Allstate Corp. settled a 2010 lawsuit over $700 million in devalued mortgage-backed securities. Terms of the accord weren’t revealed.
Lawyers for the companies asked U.S. District Judge Mariana Pfaelzer in Los Angeles to dismiss the case. Two years ago, she ruled that Allstate couldn’t hold Bank of America liable as the parent company of the mortgage lender it acquired in 2008.
Bank of America is resolving a series of lawsuits against Countrywide, the largest U.S. home-lender in the run-up to the housing market collapse and 2008 financial crisis. The unit was accused of extending mortgages to unqualified borrowers and misleading investors as to the health of securities it backed.
Bank of America last month agreed to a $9.5 billion settlement with the Federal Housing Finance Agency, the conservator of Fannie Mae and Freddie Mac, which had bought $26.6 billion in mortgage-backed securities that Countrywide sold between 2005 and 2008.
BofA’s Countrywide unit last year settled a class-action, or group, lawsuit by investors who said the lender duped them into buying $500 million worth of the securities. In a separate $8.5 billion settlement, the Charlotte, N.C.-based bank resolved investor claims it failed to buy back delinquent mortgages packaged in the securities.
Marc Raybin, a spokesman for Northbrook, Ill.-based Allstate, declined to comment on the terms of the accord. “The parties have resolved the litigation on mutually agreeable terms,” Raybin said in an emailed statement.
Lawrence Grayson, a spokesman of Bank of America, declined to comment on the Allstate settlement.