Appeals court reverses Countrywide suit dismissal

AP News
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Posted: May 19, 2011 5:46 PM
Appeals court reverses Countrywide suit dismissal

An appeals court has overturned the dismissal of a class-action lawsuit brought by investors against mortgage giant Countrywide Financial Corp.

The move by a panel of the California 2nd District Court of Appeal reverses the decision by a Superior Court judge in Los Angeles last year. That court threw out the complaint on grounds that a state court had no jurisdiction to hear the case, citing the U.S. Securities Act.

In the ruling issued Wednesday, the appeals court disagreed, concluding such a complaint could be heard in state court.

The decision allows the case to proceed.

The investors claim Countrywide had false or misleading statements in documentation for the mortgage-backed securities that they bought from the lender between 2005 and 2007.

Bank of America acquired Countrywide in July 2008.