Wednesday, December 29, 2010

AllState Sues Bank of America over Residential Mortgage Securities

Allstate Corp. (ALL) has shed its opening bell upside and is down fractionally, after the insurance carrier said it was suing Bank of America Corp. (BAC) over mortgage-backed securities that went sour.

The suit alleges the bank's Countrywide unit knew $700 million in residential mortgage-backed securities it sold Allstate were a "toxic mix of loans given to borrowers (who) could not afford the properties and thus were highly likely to default."

BAC shares also were higher in initial trade today.