Flagstar, AGM Headed To Trial In MBS Coverage Fight

Law360, Wilmington (March 1, 2012, 9:15 PM EST) -- Assured Guaranty Municipal Corp.’s contract fight with Flagstar Bank FSB over insurance coverage for $900 million of the bank’s mortgage-backed securities is headed to trial after a New York federal judge nixed Flagstar’s bid for summary judgment Wednesday.

In a brief order, U.S. District Judge Jed Rakoff denied Flagstar’s summary judgment motion, saying he would issue an opinion explaining the ruling “in due course.”

Filed in April, AGM’s suit accuses Flagstar of lying about the origination and underwriting of thousands of home equity loans grouped into...
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