"AIG Unit Sues Countrywide for Misrepresenting Mortgage Loans
By Edvard Pettersson
March 19 (Bloomberg) -- An American International Group Inc. unit sued Countrywide Financial Corp., accusing the mortgage lender of misrepresenting the underwriting standards of loans the company insured.
“As a result of the unprecedented number of defaults in the mortgage loans, United Guaranty has already paid out insurance claims totaling over $30 million and is exposed to additional claims of several hundred million dollars more,” AIG said today in a complaint filed in federal court in Los Angeles.
Countrywide, which was bought by Bank of America Corp., sought insurance for the mortgage loans to increase the credit ratings of mortgage-backed securities in which the loans were bundled, according to the complaint.
Shirley Norton, a Bank of America spokeswoman, declined to comment on the complaint.
The case is United Guaranty Mortgage Indemnity Co. v. Countrywide Financial Corp., U.S. District Court, Central District of California (Los Angeles.)"