MBIA’s Fraud Claim Against Countrywide May Proceed, Judge Says

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MBIA Insurance can proceed with a claim Bank of America Corp.’s Countrywide Financial committed fraud in obtaining guarantees on billions of dollars of trust obligations of mortgage-backed securities, a judge ruled. ****The insurer, based in Armonk, New York, claimed in a suit filed in New York State Supreme Court in Manhattan that Countrywide “falsely represented” to both MBIA and the trust investors that Countrywide originated the mortgage loans in strict compliance with its underwriting standards and guidelines. The insurer has paid out more than $459 million in guarantees as a result, MBIA said in the 2008 suit.


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