Monday, October 06, 2008

Bond Insurer Sues Countrywide For Lax Standards When Making Bad Loans

In New York City, The Lower Hudson Journal News reports:
  • Lax lending standards and fraud by the giant home lender Countrywide Financial Corp. contributed to thousands of home mortgages going into foreclosure during the housing bust, leading to major losses for bond insurer MBIA Inc., according to a lawsuit filed by MBIA.

  • MBIA alleges in the suit that its insurance unit incurred $459 million in costs related to the bad loans at Countrywide and that additional claims exceed several hundred million dollars. MBIA seeks damages from Countrywide in the suit filed Tuesday at the New York State Supreme Court in Manhattan.


  • MBIA’s insurance unit provided guarantees on billions of dollars of trust obligations of Countrywide mortgage-backed securities, but would have not done business with Countrywide if it had known about the lax standards, according to the lawsuit.

For more, see MBIA sues Countrywide.

See also, MarketWatch: MBIA unit sues Countrywide units over securitizations.

Go here, Go here and Go here for more on other Countrywide lawsuits & other problems. CountrywideProblemsZeta