American Banker (10/03/08) P. 5
MBIA Insurance Corp. has filed suit against Countrywide Financial Corp. accusing the lender of engaging in fraud that cost MBIA $459 million in policy claims on mortgage bonds it guarantees and boosted its exposure by hundreds of millions of dollars. The suit alleges that Countrywide "deliberately abandoned its own guidelines to drive-up revenues from increased origination fees, securitization fees, and servicing fees--no matter the cost to borrowers, investors or guarantors like MBIA." Another bond insurer, Ambac Financial Group Inc., said in the second quarter that more than 1,800 loans examined by consultants showed evidence of "substantiated breaches of representation and warranties."
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