MBIA's Suit Against BofA, Countrywide Survives Appeal

Law360, New York (June 30, 2011, 3:48 PM EDT) -- A New York appeals court on Thursday kept alive MBIA Inc.'s allegations that Bank of America Corp.'s Countrywide subsidiaries committed fraud by making $20 billion in securitized home loans appear more creditworthy to trick the monoline insurer into backing them.

MBIA's allegations are specific enough that its fraud and breach of contract claims aren't the same, so the insurer's fraud claim shouldn't be dismissed, Justice Rosalyn H. Richter wrote for the unanimous five-judge panel of the First Department, a state appeals court in Manhattan.

"Because MBIA...
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