UBS Underestimated Mortgage Securities Risk: Insurer Suit

Law360, New York (February 2, 2012, 10:51 PM EST) -- Assured Guaranty Municipal Corp. on Thursday accused UBS AG’s residential mortgage lending unit of falsely overstating the quality of mortgage loans underlying the residential mortgage-backed securities that tanked in the 2008 housing crisis and for which Assured had provided financial insurance.

In its complaint filed in New York state court, Assured claimed that it discovered that the securities, which UBS Real Estate Securities Inc. had sold investors in 2006 and 2007, were much riskier than UBS Real Estate had originally stated, after insurance claims started pouring...
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