2009-05-14housingwire.com

Monoline bond insurer MBIA faces a lawsuit by 18 financial firms over its decision to split its mortgage exposures off of its municipal-bond insurance portfolio.

The allegations claim MBIA’s split and the resulting transfer of $5bn out of its main insurance business to a muni-bond insurance company constituted an unlawful effort to escape contractual obligations to cover mortgage security-related losses, according to a report filed at the Wall Street Journal.


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