Countrywide Can't Shake $4B MBS Suit In NY Appeals Court

Law360, New York (April 2, 2013, 7:22 PM EDT) -- A New York state appeals court ruled Tuesday that MBIA Inc. can pursue Bank of America Corp.'s Countrywide Financial Corp. to recover $4 billion the bond insurer paid to Countrywide mortgage-backed securities investors, finding the loans don't need to be in default to trigger a payment obligation.

Reversing part of a lower court decision from earlier this year, the five-judge appeals panel said nothing in the purchase contract's language would limit MBIA's repayment options from Countrywide to a default situation.

“The clause requires only that the...
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