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Judge OKs Shareholder Suit Against Countrywide

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Judge OKs Shareholder Suit Against Countrywide

Business

Judge OKs Shareholder Suit Against Countrywide

Judge OKs Shareholder Suit Against Countrywide

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A federal judge has ruled that executives from Countrywide, one of the nation's biggest mortgage lenders, will have to face a lawsuit from angry shareholders like the Arkansas Teacher Retirement Fund that have lost fortunes since the housing market meltdown.

RENEE MONTAGNE, host:

NPR's business news starts with executives of Countrywide off to court.

(Soundbite of music)

MONTAGNE: A federal judge has ruled that executives from one of the country's biggest mortgage lenders - that would be Countrywide - will have to face a lawsuit from angry shareholders. Since the housing market meltdown, Countrywide has become known for its aggressive and questionable loan practices. Its stock price has plummeted, costing shareholders, like the Arkansas Teacher Retirement Fund, fortunes. It's that fund that's leading the lawsuit, accusing Countrywide executives and directors of not providing enough oversight, as well as insider trading and misleading shareholders.

The executives tried to dismiss the lawsuit, but the judge said she found witness testimony about Countrywide's loan practices compelling.

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