Allstate Sues BofA Over Bad MBS: Report

Allstate is suing Bank of America over mortgage securities losses.
By Maria Woehr ,

NEW YORK(

TheStreet

) --

Allstate

(ALL) - Get Report

is suing

Bank of America

(BAC) - Get Report

for losses it allegedly suffered on $700 million of mortgage securities purchased from

Countrywide Financial

.

Bank of America is one of 18 defendants listed in the case. Others include former executives at Countrywide including CEO Angelo Mozilo, according to a

report by Reuters

.

Allstate claims that in 2003 Countrywide boosted market share by approving mortgage products that borrowers could not afford and then passed those risks onto investors.

The complaint was filed in Manhattan federal court on Monday.

This is just one of several mortgage putback lawsuits filed against Bank of America.

Pacific Investment Management Co.

,

BlackRock

(BLK) - Get Report

,

TCW Group

,

Fannie Mae

>

(FNMA.OB)

,

Freddie Mac

(FMCC.OB)

,

MetLife

(MET) - Get Report

and several monoline insurers may all be seeking buyback relief for $47 billion in mortgage-bond securitizations that were packaged by Countrywide Financial before it was acquired by BofA

.

Bank of America's putback issue could set precedents that may affect banks such as

Citigroup

(C) - Get Report

,

Morgan Stanley

(MS) - Get Report

and

Goldman Sachs

(GS) - Get Report

, which could all be exposed to billions in potential putbacks on MBS they sold to investors.

--Written by Maria Woehr in New York.

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Maria Woehr

.

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.

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.

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