Insurers Cry Foul Over $8.7B ResCap MBS Settlement

Law360, New York (February 4, 2013, 1:04 PM EST) -- Bankrupt Residential Capital LLC's insurer-creditors on Friday blasted its proposed $8.7 billion settlement with 392 securitization trusts over warranty breaches tied to residential mortgage-backed securities, saying the deal was designed to protect the interests of the mortgage company’s parent Ally Financial Inc.

The objectors — which include MBIA Inc., Wilmington Trust NA  and Assured Guaranty Municipal Corp. — told U.S. Bankruptcy Judge Martin Glenn that ResCap’s decision to grant an allowed of $8.7 billion for contractual loan repurchase claims was, in MBIA's words, “a thinly veiled...
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