Assured's $90M Win Gives Insurers Ammo Against Banks

Law360, New York (February 6, 2013, 8:54 PM EST) -- A ruling for a monoline insurer in its contract suit against a Michigan bank over home loans backing nearly $1 billion in mortgage-backed securities sets a precedent for monoline insurers to use statistical samples of loan pools to prove liability and damages, insurance and banking attorneys said Wednesday.

U.S. District Judge Jed S. Rakoff ruled Tuesday that Assured Guaranty Municipal Corp. had shown that Flint, Mich.-based Flagstar Bank FSB had breached its contracts by misrepresenting the quality of the loans in two MBS pools that Assured...
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