Insurer Seeks To Revoke AHM Loan Coverage

Law360, New York (September 8, 2009, 3:46 PM EDT) -- Triad Guaranty Insurance Corp. has filed an adversary proceeding against American Home Mortgage Holdings Inc., claiming the bankrupt mortgage lender failed to properly underwrite thousands of loans covered by the insurer, causing defaults and rescissions to skyrocket.

Triad filed a complaint Friday in the U.S. Bankruptcy Court for the District of Delaware seeking to wriggle out of several master insurance policies it issued to AHM to cover potential defaults on 29,000 home loans.

AHM failed to adhere to prudent underwriting guidelines, effectively causing Triad to insure...
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