By Kyle Chezum Updated on 12/29/2010

Allstate Sues Bank of America Over Mortgage Securities

12/29/10

Allstate Corp, a home and auto insurance company, purchased more than $700 million in mortgage backed securities from Countrywide when the mortgage firm was still in operation.  Years later, Allstate has taken out a major lawsuit against Countrywide, Bank of America, and 17 other defendants, seeking as retribution for losses suffered on the securities.

Allstate has alleged that Countrywide misrepresented the values and risks of the securities.  "Defendants knew the loans offloaded onto Allstate were a toxic mix of loans given to borrowers that could not afford the properties, and thus were highly likely to default," the insurance company stated in a complaint filed on Monday.

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