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MBIA (MBI) gains 6.7% after Judge Rakoff issues what may be a precedent-setting ruling in...

MBIA (MBI) gains 6.7% after Judge Rakoff issues what may be a precedent-setting ruling in Assured Guaranty vs. Flagstar. The ruling - says a lawyer - puts to rest the main argument MBS originators like BofA and JPMorgan have put forth to counter insurers' claims their breaches of representations and warranties did not cause losses. BAC and JPM both down about 1% premarket.
Comments (6)
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Excellent; MBI's settlement prospects with BAC appear to be very good. This could be a great year for MBI.
    6 Feb 2013, 09:31 AM Reply Like
  • MexCom
    , contributor
    Comments (3053) | Send Message
     
    The fact remains that these investment vehicles were not guaranteed against risk. The complaint is that the risk was greater than what was presented. The loans backing these were originally performing when the securities were sold. The court in each case would have to rule on the specific security in question and the realm of risk entailed that the original presentation was outside the realm of risk. In an economic meltdown, all securities are at a maximum of risk that could entail total loss. This was the risk that as much it would not be highly probable could occur and the risk was accepted at the time of security purchase.

     

    I would not interpret this as a blanket precedent placing a claim against the banks.

     

    6 Feb 2013, 09:51 AM Reply Like
  • socrates+
    , contributor
    Comments (17) | Send Message
     
    actually, the R&Ws made by flagstar in these pools were a lot softer than the R&Ws made by bac, for example.
    6 Feb 2013, 11:30 AM Reply Like
  • lcmucci
    , contributor
    Comments (17) | Send Message
     
    Mexcom

     

    The banks lawyer's should read your column, maybe the judge too.
    6 Feb 2013, 10:20 AM Reply Like
  • TwistTie
    , contributor
    Comments (2476) | Send Message
     
    I think it's fascinating that this kind of thing is still going on.

     

    How much longer will these lawsuits be in the news?
    6 Feb 2013, 11:48 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5615) | Send Message
     
    Wished I listened to my uncle and bought (MBI) at $3. Now it is $10.47. Well, still off a lot from $70.
    6 Feb 2013, 09:54 PM Reply Like
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