Already a Bloomberg.com user?
Sign in with the same account.
MBIA Inc. (MBI), which sued Bank of America Corp. (BAC)’s Countrywide Financial in 2008 over mortgages backing securities the insurer guaranteed, knew of the risks behind the loans and can’t claim it was defrauded, Countrywide said.
MBIA knew of the risk of losses on the securities it agreed to insure and placed $21 billion at risk in 15 securitizations without reviewing a single loan file, Countrywide said in a filing today in New York State Supreme Court in Manhattan.
“Countrywide provided MBIA with ample warning of the risks involved in insuring the securitizations,” Countrywide said in a motion seeking pre-trial summary judgment rulings in its favor.
Charlotte, North Carolina-based Bank of America and MBIA, which also filed a summary judgment motion today, will argue the motions before Justice Eileen Bransten.
MBIA claimed in its filing that at least 56 percent of the loans at issue were “materially defective” and that Countrywide compounded its misconduct by refusing to buy back loans. Countrywide also orchestrated a strategy to frustrate the repurchase process, the bond insurer said.
“Countrywide’s overarching goal in responding to repurchase demands was to reduce exposure and limit losses to the company, rather than adhere to its contractual repurchase obligations,” Armonk, New York-based MBIA said.
The case is MBIA Insurance Corp. v. Countrywide Home Loans Inc., 602825-2008, New York State Supreme Court (Manhattan).
To contact the reporter on this story: David McLaughlin in New York at email@example.com
To contact the editor responsible for this story: John Pickering at firstname.lastname@example.org