Tom Armistead submits: Yesterday MBIA (MBI) sued Countrywide, now part of Bank of America (BAC), alleging fraud, misrepresentation and breach of contract in connection with over 14 billion worth of MBS-containing Countrywide mortgages and insured by MBIA. MBIA has already incurred $459 million in losses. This is the beginning of what may be a long battle by the bond insurers MBIA and Ambac (ABK) to recover part of their losses from those responsible, a process they refer to as remediation. Both companies have stated that they expect material/substantial recoveries due to misrepresentations and breaches of warranty with respect to securities that they have insured. Complete Story » ...
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