TED WHEELER

STATE TREASURER 350 WINTER ST. NE SALEM, OREGON 97301 Phone 503-378-4329 www.oregon.gov/treasury

ELLEN ROSENBLUM
ATTORNEY GENERAL 1162 COURT ST. NE SALEM, OREGON 97301 Phone 503-378-6002 www.doj.state.or.us

FOR IMMEDIATE RELEASE: APRIL 17, 2013

CONTACTS: James Sinks, Oregon State Treasury 503-508-0737 or James.Sinks@state.or.us Jeff Manning, Department of Justice 503-378-6002 or jeff.d.manning@state.or.us

Securities settlement in Countrywide lawsuit will partially repay Oregon, other trust funds
Oregon joined a class action with other investors who were misled about mortgage quality SALEM Oregon Treasurer Ted Wheeler and Attorney General Ellen Rosenblum today announced that Bank of America will pay $500 million to settle lawsuits by investors nationwide, including the Oregon Public Employees Retirement Fund, against Countrywide Financial Corp. Countrywide, which was acquired by Bank of America in 2008, misled investors into buying risky mortgage-backed securities prior to the worldwide market crash in the 2000s. The deceit ultimately cost Oregon: The Oregon pension fund was induced to invest $200 million into home loans originated by Countrywide, and lost $29 million as a result of misrepresentations by Countrywide and its financial underwriters, the lawsuit said. Oregon is sending a clear message that we will go after those who harm our citizens, public employees or investments, said Treasurer Wheeler, who is the states custodian of public funds and a member of the Oregon Investment Council. The entire country paid a dear price for Countrywides and much of the financial industrys aggressive risk-taking, Rosenblum said. This settlement is one small step toward obtaining some justice for the thousands of lives disrupted by the housing bust and economic crash. The typical recovery in securities class action cases is 10 cents on the dollar, but the state and its attorneys hope they can exceed that threshold in negotiations. The exact Oregon share of the national $500 million settlement, announced today, wont be known for potentially months.

Oregon joined with the Maine pension fund on the lawsuit, which was filed in California and accused Countrywide of violating securities law by making statements to investors that were materially false and misleading because they misrepresented and/or failed to disclose information crucial to investors ability to accurately assess the risks of their investments. According to the lawsuit, from 2005 through 2007, Countrywide was the nations largest residential mortgage lender originating in excess of $850 billion in home loans throughout the United States in 2005 and 2006 alone. The lawsuit alleged that Countrywides ability to originate residential mortgages on such a massive scale was facilitated, in large part, by its ability to rapidly package -- or securitize -those loans and then, through the activities of the underwriter defendants, sell them to investors as purportedly investment grade mortgage-backed securities. The suit says that Countrywide provided documents that falsely claimed that all the mortgage loans held in the investment fund met accepted underwriting standards for evaluating prospective buyers credit history and ability to repay the loan. Countrywide also falsely claimed that its appraisals met acceptable standards designed to insure that the value of the property was adequate collateral for the mortgage, the lawsuit said. The Oregon State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. State investment policies are overseen by the Oregon Investment Council. The State Treasury also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices. You can track Treasury-related news on Twitter at @OregonTreasury. ###