BofA Loses Ruling Against MBIA in Fight Over Loans

Bank of America Corp. (BAC) lost a ruling in a court fight against MBIA Inc. (MBI) that will help the bond insurer as it tries to recover losses on home loans made by the bank’s Countrywide Financial unit.

MBIA, which says it was duped into guaranteeing payment on Countrywide mortgage bonds, needs only to show the lender made misrepresentations about the loans backing the bonds, instead of establishing they caused the losses the insurer is seeking to recover, New York state Judge Eileen Bransten said in a decision issued today.

“No basis in law exists to mandate that MBIA establish a direct causal link between the misrepresentations allegedly made by Countrywide and claims made under the policy,” she wrote.

The ruling is among legal disputes with bond insurers and investors that “could significantly impact” the potential costs from loans made before the collapse of the U.S. housing market in 2008, Bank of America said in a regulatory filing in August.

Defeats on such matters may add as much as $9 billion to what Bank of America owes bond insurers, according to an August estimate by hedge fund Branch Hill Capital, which has bet against the lender’s stock and has invested in MBIA.

Rest here…

Copy of ruling below…

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4closureFraud.org

MBIA Insurance Corp. v. Countrywide Home Loans Inc