Banks Blame Countrywide for U.K. Mortgage Losses in 97 Lawsuits

Suninder Sandha bought his luxury apartment in Coleorton Hall, a 19th century country mansion near Leicester in central England, using a 1.2 million-pound loan ($1.86 million) from Barclays Plc in 2005.

When the property market collapsed two years later, Sandha couldn’t make his mortgage payments and Barclays seized the apartment, selling it for 500,000 pounds. The lender has now sued Countrywide Plc, whose surveying unit valued it at the peak of the boom, for its losses, according to court papers.

The suit is one of 38 filed last year in London’s High Court against Countrywide, the nation’s largest residential property broker, by lenders including Barclays, Lloyds Banking Group Plc and GMAC-RFC. That’s more claims than any of the four largest U.K. banks faced in 2011, according to data compiled by Bloomberg. As many as 97 lawsuits have been filed since 2007 against Countrywide, bought that year by private-equity firm Apollo Management LP.

“These banks have incurred huge losses and they are looking for someone to blame,” said Alexandra Anderson, a partner at law firm Reynolds Porter Chamberlain LLP representing surveyors including Countrywide. “Often the blame is themselves, and the lending practices they had.”

Countrywide, now also owned by Oaktree Capital Management LLC and Alchemy Partners LLP, said in an e-mailed statement it had seen a considerable increase in professional negligence claims, particularly from now-defunct lenders.

‘Fulfilled Our Responsibilities’

“We will continue to defend our position when we believe we have fulfilled our responsibilities,” Countrywide said. “If an error is made, then we do seek to settle with claimants.”

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