AIG Unit Sues Countrywide

The American International Group Inc.'s (AIG) United Guaranty Mortgage Indemnity Co. unit has filed a complaint in federal court against Countrywide Financial Corp., Bloomberg News reports.

The AIG unit is claiming Countrywide misrepresented the underwriting standards of mortgages insured by United Guaranty.

"As a result of the unprecedented number of defaults in the mortgage loans, United Guaranty has already paid out insurance claims totaling over $30 million and is exposed to additional claims of several hundred million dollars more," United Guaranty says in its complaint.

The insurance unit says a review of loan files reveals that many of the mortgages covered by United Guaranty contained defects, including missing documents and misrepresented credit scores, the Bloomberg reports says.

SOURCE: Bloomberg

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