U.S. District Judge Mariana R. Pfaelzer of the Central District of California yesterday certified a class action lawsuit in a case against Countrywide. The suit accuses the mortgage lender of deceptive practices in the sale of MBS.
The judge also appointed Washington, D.C.-based law firm Cohen Milstein Sellers & Toll as lead counsel in the case. In this capacity, the law firm will give notice to members of the class about the lawsuit.
Pfaelzer signed an order certifying class consisting of all persons or entities that bought MBS from eight groups of securities sold by Countrywide entities prior to January 14, 2010. For a copy of the order please click here.
The order came after Countrywide stipulated to a proposed class in conformity with the judge’s previous rulings in the case. The agreement by Countrywide and the plaintiffs cut short a prolonged legal argument over whether the issues to be addressed in this litigation can be resolved on a class-wide basis instead of investor-by-investor.
The class action lawsuit filed in 2010 by several state retirement funds alleged that the mortgage lender made use of materially false or misleading documents to sell MBS worth billions of dollars that were downgraded to junk by 2008.
The class representatives include the Iowa Public Employees’ Retirement System, the Oregon Public Employees’ Retirement System, the Orange County Employees’ Retirement System and the General Board of Pension and Health Benefits of the United Methodist Church.
“This is a major step in holding Countrywide accountable for misrepresenting the mortgages it was securitizing,” said Steven Toll, plaintiffs’ lead counsel and a partner from Cohen Milstein. “We are now able to proceed with factual discovery regarding the quality of mortgages that were packaged and sold to investors.”
The case is called Maine State Retirement System et al., v. Countrywide Financial Corp. et al., case number 10-CV-00302, in the U.S. District Court of the Central District of California.