Via LA Times:
Countrywide agrees to pay $600 million to settle shareholder lawsuits
Countrywide Financial Corp., which epitomized the home-loan industry's boom and bust, has agreed to pay $600 million in the largest settlement yet of shareholder lawsuits stemming from the mortgage meltdown.
The agreement, given preliminary approval Monday by U.S. District Judge Mariana Pfaelzer in Los Angeles, would end several class actions brought on behalf of investors in Countrywide stock.
Big settlement...but all the guys at the top of this white-collar crime ring escape any liability or financial obligation to shareholders. Those profiting the most from it all will walk away pretty unscathed.
(flip)
Countrywide's bad reputation is infamous all across the....well, might as well say it...the countryside. Bank of America took over in 2008, acquiring Countrywide's portfolio at a discount, I would imagine. Many of these loans are high-interest ARM's or OPTION ARM's. Ask anyone who works in bankruptcy, loss mitigation at a lender, or at HUD, and they'll have plenty of horror stories about loans originated by Countrywide. I'd ask a buddy who once worked there, but it's probably an awkward conversation piece.
Countrywide's outside accounting firm, KPMG, which signed off on the lender's financial statements at the height of the boom in 2005 and 2006, has agreed to pay an additional $24 million under the settlement.
By ending the lawsuits, the accord would benefit a number of former Countrywide executives and directors who were named as defendants in the litigation. They would not have to help fund the payments to shareholders. The defendants include longtime Countrywide Chief Executive Angelo Mozilo, former President David Sambol, former Chief Financial Officer Eric Sieracki and ex-board members including former California Treasurer Kathleen Brown, 12-time NBA all-star Oscar P. Robertson and onetime U.S. Housing Secretary Henry G. Cisneros.
The settlement also would clear the liability of a list of financial firms that underwrote the Countrywide stock offerings and were named as defendants.
The defendants admitted no wrongdoing, and they have contested the allegations in the shareholder suit and other legal actions.
There are also pending investigations, however, by the Justice Dept and CA state AG.