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Allstate suit details, in black & white, how Countrywide routinely lied in making MBOs

ZeroHedge link

Notes: 1) The US taxpayer is on the hook for any of these that are bad (right? I can’t keep straight which of these deals we’re acting as backup for).

2) Countrywide = Mozillo = the guy who just happened to stroll into the room when the CHAIRMAN OF THE SENATE BANKING COMMITTEE called ‘a friend’ at Countrywide to see if he could get a good deal on a refi. Why isn’t this on the evening news?! Why aren’t these people in jail?! I seriously am worried about the world I am leaving my kids. Is this how it felt, as Europe slid into the Dark Ages.

Excerpt:

A few days ago, news broke that MBIA was allowed to use statistical sampling in its ongoing Bank of America fraud lawsuit. This happened despite the Countrywide acquiror’s loud protests. And now, courtesy of today’s brand new lawsuit against BofA (and Agent Orange himself) filed by Allstate, in which the insurer “seeks unspecified damages, alleges fraud, negligent misrepresentation and violation of U.S. securities laws” we know just why Bank of America was so very against allowing sampling to be used by plaintiffs. According to the full report (pdf attached below), Allstate has determined that Bank of America misrepresented virtually everything in its prospectuses: from the percentage of owner-occupied properties reped in prospectuses (about a 10% differential), to the LTV thresholds on represented loans (both at the 90% and 100% threshold), while inbetween finding willful and malicious intent to defraud and deceive. We are confident that none of this, however, will result in a prison sentence for Mozillo, as laws in America are meant to be broken by anyone who can demonstrate an LTV more than 100,000% or have more than $100MM in annual income (including that derived from golden parachutes).

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