On March 25, 2008, after hearing oral argument, Judge David Hall of the First District Court in Santa Fe, New Mexico issued a ruling from the bench upholding plaintiffs' complaint and denying the defendants' motions to dismiss a case brought by three New Mexico funds for damages sustained on over $375 million par-value of Countrywide mortgage-backed securities.

Josh Silverman of Pomerantz's Chicago office is co-lead counsel for the plaintiffs in the case, New Mexico State Investment Council, New Mexico Public Employees' Retirement Association, and New Mexico Educational Retirement Board.

Judge Hall explained that the plaintiffs adequately pled that Countrywide misrepresented its underwriting and origination practices in the registration statements and prospectuses used to issue the fifteen (15) mortgage-backed securities purchased by plaintiffs. The complaint alleges that Countrywide failed to disclose damaging practices including falsification of loan applications, flipping of unqualified borrowers into "no doc" programs, and inflation of appraisals. The complaint also alleges that Countrywide misrepresented its compliance with state and federal laws. Since the filing of this lawsuit, Countrywide has paid over $8 billion to settle charges of illegal conduct with more than a dozen state attorneys general.

The case is set for trial in May, 2010, and is captioned New Mexico State Investment Council, et al. v. Countrywide Financial Corp., et al., No. D-0101-C-2008-02289 (N.M. 1st Dist.).

 

 



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