Allstate is not allowed to file claims against Countrywide

U.S. District Judge Mariana Pfaelzer in Los Angeles said Allstate Corporation cannot pursue federal securities claims against Countrywide Financial Corporation because investments in mortgage-backed securities made by Allstate with Countrywide were not among the securities that suffered significant losses in 2007 and 2008 leading up to the housing crisis. The judge said only securities purchased during that specific time frame fall within the statute of repose for the claim.

Bloomberg reported that Allstate is allowed to file state-law claims against Countrywide for committing fraud by not disclosing to investors that the mortgage-backed securities they purchased did not meet the lender's standards.

Maryellen Thielen, a spokeswoman for Allstate, said the company is considering amending its complaint and resubmitting the claim, or appealing the court's decision. Judge Pfaelzer also granted Bank of America's request to be dismissed from the lawsuit, as Bank of America and Countrywide were sued by Allstate in federal court in December 2010.

According to Reuters, Pfaelzer is overseeing nationwide litigation over mortgage-backed securities from Countrywide, and has issued rulings favorable to Bank of America in November 2010 by decreasing the amount of securities that can be applied to the case from $352 billion to $31 billion.

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