Freddie Mac Mortgage Insurance Claims 'Illogical,' MGIC Says

Law360, New York (May 17, 2012, 12:45 PM EDT) -- Mortgage Guaranty Insurance Corp. slapped Freddie Mac with a lawsuit Wednesday in Wisconsin federal court, claiming the government-backed housing giant was seeking billions of dollars in mortgage loan insurance through an "entirely illogical" contract interpretation.

MGIC alleges Freddie Mac breached the terms of a mortgage insurance agreement by overstating MGIC’s aggregate loss limit, a measurement of risk for pooled mortgage policies that MGIC issued to Freddie Mac. A high aggregate loss limit would require MGIC to set aside large amounts of capital and limit how much...
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