Ambac Sues BofA, Countrywide For Mortgage Fraud

Law360 (September 29, 2010, 4:00 PM EDT) -- Ambac Financial Group Inc. has launched a lawsuit against Bank of America Corp. and three Countrywide Financial Corp. entities alleging they caused it to lose hundreds of millions of dollars on failed mortgage-backed securities it insured.

Countrywide failed to disclose that its business model was premised on the perpetual origination and refinancing of loans to borrowers who did not have the ability to make the required payments, according to the complaint Ambac filed in the New York State Supreme Court on Tuesday.

Countrywide emerged as the leading mortgage lender in the country over the past decade as it fueled the inflation...

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