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NEW YORK CITY-A class-action suit has been filed against Countrywide Financial Corp. on behalf of investors in 374 securitization trusts to which the company sold subprime and Alt-A mortgage loans. The suit, filed in New York State Supreme Court, alleges that Countrywide is required to purchase, at full par value, any loan on which it had agreed to reduce payment as part of its Oct. 6 settlements with 11 attorneys-general over predatory lending practices.

As part of those settlements, Countrywide had agreed to reduce payments due on hundreds of thousands of mortgage loans by up to $8.4 billion. “Countrywide plans not to absorb the $8.4 billion reduction in mortgage payments itself…but rather to pass most or all of that reduction in to the trusts that purchased mortgage loans from Countrywide,” the complaint states. “If the trusts are forced to absorb the reduction in payments occasioned by Countrywide’s settlement of the allegations against it, then the value of the securities that those trusts sold to investors will decline.”

Locally-based law firm Grais & Ellsworth LLP says in the complaint that it filed the suit here because Countrywide Home Loans–a wholly owned subsidiary of Calabasas, CA-based Countrywide Financial–is a New York corporation and has consented to the jurisdiction of courts within the state. The lead plaintiff is Greenwich, CT-based Greenwich Financial Services Disterssed Mortage Fund 3 LLC, an investment vehicle managed by William A. Frey of Greenwich Financial Services. According to published reports, the firm believes Countrywide and its parent company Bank of America could be liable for as much as $80 billion, assuming 400,000 mortgage loans worth an average of $200,000 each.

In a statement, Countrywide says the lawsuit “represents an unlawful effort to assert rights of the trusts. Accordingly, Countrywide intends to pursue plaintiffs for any and all remedies available to it, including the recovery of its costs incurred in having to defend this improper action.”

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