NY Pension Funds Settle Countrywide Lawsuit

February 28, 2011 (PLANSPONSOR.com) – A federal judge has approved a $624-million settlement in a lawsuit by several New York public pension funds alleging  fallen mortgage giant Countrywide Financial Corp. lied about how risky its business had become.

The New York State Common Retirement Fund and five New York public pension funds claimed the mortgage lender hid the true nature of its business during the housing market’s boom years, according to the Associated Press.

However, other institutional investors involved in the suit decided to opt out of the settlement and pursue individual claims. The AP said 33 plaintiffs decided to pursue that course, according to Blair Nicholas, an attorney representing 16 of the institutional investors, including the California Public Employees’ Retirement System, BlackRock Inc., American Century and T. Rowe Price.

Some $22.5 million of the settlement was set aside for up to two years toward future claims by investors who opted out of the deal.

Calabasas-based Countrywide was once the nation’s largest mortgage lender before being acquired by Bank of America in 2008.