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The federal panel on multidistrict litigation has coordinated eight securities lawsuits filed against Countrywide Financial Corp. on behalf of investors who purchased its mortgage-backed securities. The U.S. Judicial Panel on Multidistrict Litigation on Aug. 15 ordered the Countrywide cases coordinated before U.S. District Judge Mariana Pfaelzer, who already was overseeing several of the suits in Los Angeles. “We are pleased with the panel’s decision,” said Lawrence Grayson, a spokesman for Bank of America Corp., which purchased Countrywide in 2008. The multidistrict proceeding joined several other cases in which investors have sued financial institutions, claiming that they were misled about the mortgage-backed securities they purchased. It was the third MDL to target Countrywide since the 2008 financial crisis. Another MDL involving Countrywide’s mortgage lending practices is pending before U.S. District Judge John Heyburn in Louisville, Ky. U.S. District Judge Dana Sabraw in San Diego is hearing an MDL regarding the sales and marketing practices of Countrywide’s mortgages. The latest MDL is limited to investors who claim they were misled about the origination practices or credit quality of mortgages Countrywide originated between 2004 and 2007. Many of the suits were filed this year. Four are in California, one in Illinois, one in Ohio, one in Oklahoma and one in New York. In a May 23 motion to coordinate the “large and growing number of securities disclosure cases,” Countrywide’s lawyer, Brian Pastuszenski, a partner at Boston’s Goodwin Procter, sought to coordinate 12 lawsuits brought against his client on behalf of investors in bonds, stock and mortgage-backed securities. Several investor plaintiffs opposed the motion, citing differences in facts and geography. The federal panel declined to coordinate four of the suits — all in California — because they weren’t limited to mortgage-backed securities. Among them were suits filed on Jan. 26 by institutional investors who opted out of a $601 million settlement with Countrywide that Pfaelzer approved on Feb. 25. Joseph Tabacco, managing partner of Berman DeValerio’s San Francisco office, who filed two of the opt-out suits on behalf of the state of Michigan and an institutional fund in Fresno, Calif., praised the panel’s decision. “Since the Michigan and Fresno actions will substantially track the discovery taken in the now settled class action, it makes perfect sense to keep these cases separated from cases involving mortgage-backed securities which, while related to the overall well documented problems existing at Countrywide, giving rise to its spectacular collapse, will likely raise issues unique to those cases that would most efficiently be handled outside of the securities opt out cases.” The panel split claims in another suit, filed in the Southern District of New York, against Countrywide and the Bank of New York Mellon, a trustee for four mortgage securitization trusts. The claims against Countrywide will be in the MDL, while the claims against the Bank of New York Mellon will be transferred back to New York, the panel decided. The panel agreed with Bank of America to exclude another case pending in New York that involved alleged misrepresentations made by Bank of America about its stock. Countrywide is not a defendant in that case, the panel concluded. The MDL is styled In re: Countrywide Financial Corp. Mortgage-Backed Securities Litigation, No. 2265. Amanda Bronstad can be contacted at [email protected].

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