NU Online News Service, Feb. 23, 12:52 p.m.EST
|Allstate Corp. has filed another lawsuit related tomortgage-backed securities in an attempt to get back what theinsurer thinks it is owed.
|Citigroup and Deutsche Bank are now targeted by Allstate. Thelawsuit filed Feb. 17 in New York alleges the banks violated statefraud and misrepresentation laws as well as federal securitieslaws. The banks omitted information or gave untrue statements aboutthe quality of the mortgages, Allstate said.
|In a statement, the Northbrook, Ill.-based insurer said thatbetween 2005 and 2008 it bought more than $200 million inmortgage-backed securities from Citigroup’s Citimortgage Inc., andduring the same time Allstate purchased about $185 million of thesecurities from defendants Ace Securities Corporation and DeutscheBank Securities Inc.
|Allstate has filed similar lawsuits against J.P. Morgan Chase & Co. and Bank of America’s Countrywide FinancialCorp. Allstate said it bought a combined $1.45 billion inmortgage-backed securities from these banks.
|In each suit, Allstate seeks damages including rescission,monetary losses, attorneys’ fees and costs, and prejudgmentinterest, the insurer said.
|Last month, Gerald Silk, a partner for Bernstein Litowitzin New York, predicted an uptick in litigation related toresidential mortgage-backed securities, and he pointed to Allstateas a prime example.
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