Tags: mbia | bofa | countrywide | mortgages

MBIA Cleared for Fraud Suit Vs. BofA's Countrywide

Tuesday, 03 Jan 2012 04:38 PM

The bond insurer MBIA Inc won court permission to pursue claims accusing Bank of America Corp's Countrywide Financial unit of fraudulently inducing it to insure risky mortgage-backed securities.

New York State Supreme Court Justice Eileen Bransten in Manhattan said MBIA need not establish a "direct causal link" between Countrywide's alleged misrepresentations and payments it made on the insurance policies in order to prevail on its fraud claims.

She also said MBIA could seek damages by proving fraud and any breaches of the insurance policies by Countrywide.

Bank of America and MBIA were not immediately available for comment.

MBIA shares rose as much as 11.4 percent after the ruling. They closed up 94 cents, or 8.1 percent, at $12.53.

 

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Tuesday, 03 Jan 2012 04:38 PM
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