The legal wranglings continue for what was once the nation's premier subprime mortgage lender, Countrywide Financial Corp. The company, now a part of ""Bank of America Home Loans"":https://www7.bankofamerica.com/home-loans/overview.go was hit with another lawsuit Wednesday, this time from United Western Bank, a subsidiary of Denver-based ""United Western Bancorp, Inc."":http://www.uwbancorp.com
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United Western is suing Countrywide for losses it incurred on six private-label mortgage-backed securities (MBS) the bank purchased from the subprime lender. According to a statement from United Western, the mortgage bonds have an aggregate original principal amount of approximately $108 million, and were purchased between October 2005 and October 2006 â€" just before the market began to tank.
""Bank of America Corporation"":http://www.bankofamerica.com is a named defendant in the complaint under successor liability law based upon the
[COLUMN_BREAK]fact that it acquired Countrywide in July 2008. The suit also names ""UBS Securities LLC"":http://www.ubs.com and certain officers of Countrywide as defendants.
United Western alleges in the complaint that each registration statement and prospectus supplement made by the defendants and used to market the MBS contained omissions and untrue statements of material facts with regard to Countrywide's underwriting practices and the characteristics of the underlying mortgage loans in the securities.
""When Countrywide offered and then sold these securities to the bank, the defendants made numerous disclosures and statements about the securities and the credit quality of the mortgage loans that backed them [that were false and inaccurate],"" said Guy Gibson, chairman of the board at United Western Bancorp. ""If we had known about these issues with respect to the Countrywide mortgaged-backed securities, we would have never purchased them in the first place.""
United Western is seeking an award of damages against the defendants for alleged violations of the Securities Act of 1933. In addition, the complaint seeks rescission regarding the purchase of each MBS and recovery of the amount paid the six securities, including statutory interest.
Gibson says he plans to ""pursue legal action against other issuers of mortgaged-backed securities"" purchased by United Western Bank or its parent company.