Not all the news in subprime securities class action litigation has been bad for plaintiffs. Last month we told you about a report from the Los Angeles Daily Journal that Countrywide had agreed to pay $600 million to settle a case alleging that the mortgage lender didn’t tell investors when it drastically loosened its lending standards. The parties have now confirmed the settlement. KMPG, Countrywide’s former auditor, also has confirmed that it will pay $24 million to settle the case.

Several pension funds, including the New York State Common Retirement Fund, serve as the lead plaintiffs in the case. Labaton Sucharow is lead counsel. Countrywide is represented by Goodwin Procter, and KPMG has Bingham McCutchen.

According to a press release issued by New York State Comptroller (and pension fund trustee) Thomas DiNapoli, the $624 million Countrywide settlement will be the 13th largest since the passage of the Private Securities Litigation Reform Act if it is approved by Los Angeles federal district court judge Mariana Pfaelzer. It will be by far the largest settlement to come out of the subprime mortgage crisis. The previous largest subprime securities settlement was Merrill Lynch’s $475 million deal.

The terms of the settlement have yet to be submitted to the court. Joel Bernstein of Labaton told us that the parties have given themselves until May 24 to hammer out the details. The agreement to settle the case, Bernstein said, came after two-and-a-half days of intense mediation that culminated on April 2. Presiding over the mediation was Boston University law school professor Eric Green and Los Angeles federal district court judge A. Howard Matz. Brian Pastuszenski of Goodwin represented Countrywide in the talks.

According to Reuters’ account of the settlement, a spokesperson for Countrywide parent Bank of America said the firm decided to settle to avoid the uncertainties of litigation. A KPMG spokesman confirmed the settlement but did not elaborate.

Bernstein told us the settlement releases all parties, including Countrywide’s underwriters, represented by Gibson, Dunn & Crutcher; and individual defendants such as former Countrywide CEO Angelo Mozillo, who is represented by Williams & Connolly and Irell & Manella.