Lloyd's Says It Won't Pay Tab For Allied's Fraud Defense

Law360, Wilmington (May 16, 2012, 6:15 PM EDT) -- Lloyd’s of London underwriters filed suit Tuesday seeking to escape footing the bill for Allied Home Mortgage Capital Corp.’s defense against a government lawsuit accusing it of lending fraud that left federal mortgage insurers to cover $834 million in defaulted loans.

In its complaint filed in New York federal court, Lloyd’s asks for a declaration from the court that it is not obligated under a professional liability insurance policy to defend or indemnify Allied, one of the largest mortgage brokers in the U.S. The insurer says...
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