Allstate Sues Credit Suisse Over Mortgage Debt

March 3, 2011 - PRLog -- www.certifiedforensicloanauditors.com

Allstate Corp on Monday sued Credit Suisse Group AG, accusing the Swiss bank of causing losses by hiding the risks on $232 million of mortgage securities it bought.

Allstate, the largest publicly traded U.S. home and auto insurer, has filed similar lawsuits against at least four other lenders: Bank of America Corp, Citigroup Inc, Deutsche Bank AG and JPMorgan Chase & Co.

The five lawsuits seek to recover for losses that Allstate said it suffered on roughly $2.1 billion of securities.

Credit Suisse did not immediately return a call seeking a comment.

Allstate is among a growing number of companies, such as the brokerage Charles Schwab Corp, suing lenders they believe misled them about the safety of mortgage debt that ultimately went sour during the housing and credit crises.

The latest suit accuses Credit Suisse of fraud in selling what it represented as "highly-rated, safe securities" backed by pools of loans with specific risk profiles. Allstate claims the defendants knew the pool included a "toxic mix of loans" held by borrowers who could not afford the properties and were likely to default, according to the complaint.

The case is Allstate Insurance Co et al v. Credit Suisse Securities (USA) LLC et al, New York State Supreme Court, New York County, No. 650547/2011.

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