MBS Sales Need Review, Bond Insurers Tell NY Reps

Law360, New York (February 16, 2011, 5:50 PM EST) -- Securities insurers need an independent review process that can swiftly handle claims sparked by loan underwriters' misrepresentations and breaches of warranties, municipal bond insurer executives told New York state lawmakers Wednesday.

Testifying at a New York State Assembly hearing, MBIA Inc. CEO Jay Brown said the bond insurer "could not have foreseen" that investment banks would "willfully ignore" their own underwriting guidelines by shilling pools of riskier-than-advertised mortgage-backed securities, which have forced MBIA to shell out $4.2 billion in investor claims and launch five lawsuits to...
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