COLCHESTER, Conn., Jan. 28, 2011 (GLOBE NEWSWIRE) -- Scott+Scott LLP announces that a class action has been commenced on behalf of purchasers of certain mortgage-backed securities sponsored by affiliates of Countrywide Financial Corporation and its wholly-owned subsidiary Countrywide Home Loans, Inc. (collectively, "Countrywide") and related trusts (the "Issuing Trusts"), issued between 2005 and 2007. The class action complaint, which alleges violations of the Securities Act of 1933 (the "Securities Act"), Securities Exchange Act of 1934 (the "Exchange Act") and the Connecticut Uniform Securities Act, was filed in the U.S. District Court for the District of Connecticut.
If you wish to serve as a lead plaintiff in the action, you must move the Court no later than March 30, 2011. Any member of the investor class may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott ( firstname.lastname@example.org, (800) 404-7770, (860) 537-5537 or visit the Scott+Scott website, ) for more information. There is no cost or fee to you.
The Complaint alleges claims under the Securities Act and Exchange Act on behalf of investors who purchased or otherwise acquired the following Countrywide mortgage pass-through certificates (the "Class"): Alternative Loan Trust Certificates CWALT 2005-43, CWALT 2007-1T1, CWALT 2007-12T1 and CWALT 2007-25 issued by CWALT, Inc. ("CWALT"); and Mortgage Pass-Through Trust Certificates CWHL 2006-HYB2, CWHL 2006-12, CWHL 2007-J2 and CWHL 2007-17 by CWMBS, Inc. ("CWMBS") (collectively referred to as the "Certificates"). The Complaint alleges that Countrywide, including certain officers and directors of CWALT and CWMBS, misrepresented the quality of the underlying mortgages that had been pooled and placed in the issuing trusts in each of the Certificates' offering documents. The Complaint also alleges that Countrywide did not follow the underwriting and appraisal standards described in the Registration Statements and Prospectus Supplements when issuing mortgages to borrowers. Moreover, the mortgages held by the Issuing Trusts and underlying the Certificates were issued based on appraisals that overstated the value of the underlying properties, thereby exposing the Issuing Trusts and the Class to greater risk of losses in the event of foreclosure. As a result of the material misrepresentations and omissions in the Registration Statements and Prospectus Supplements, the Class purchased securities that were far riskier investments than represented.
According to the Complaint, by mid-2007 the mortgages held by the Issuing Trusts and underlying the Certificates began suffering accelerating delinquencies and defaults. The defaults led to real estate foreclosures, which revealed that many borrowers did not have sufficient financial resources to satisfy their mortgage payments and that the properties underlying the mortgages were worth materially less than the loans issued. The representations made in the Registration Statements and Prospectus Supplements were materially false and misleading because at the time of the Certificates offerings, Countrywide's underwriting standards were not designed to evaluate borrowers' ability to repay their loans or to accurately assess the value of the mortgaged property underlying the Certificates. These adverse factors were not revealed and/or adequately addressed in the offering documents. Had the Class known these truths, they would not have purchased the Certificates, or they would not have purchased them at the prices that were paid.
Scott+Scott has significant experience in prosecuting major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals and other entities worldwide.
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