Banks--- Betting on the recovery Message Board

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Non-Tech : Banks--- Betting on the recovery

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2:11 PM EST

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From: Hawkmoon	5/11/2009 12:35:33 PM
	2 Recommendations Read Replies (2) of 1428

Just listened to Ambac's CC (ABK). They stated that up to 90% of all reviewed originated loans (11,000 loans reviewed) they insured violated Reps and Warranties, thus negating their legal liability to pay the claims. Essentially, they stated that the insurance was purchased from them on fraudulent terms and they are pursuing litigation and re-negotiation of insurance premiums. What was very important was that they stated banks are setting aside increased reserves to cover these additional premiums or insurance commutations. Reserves that probably will find their way to the insurers. Sounds like another hurdle the banks have to leap before returning to financial health. And it's certainly a boon to the insurance sector, which was victimized by these fraudulent loan originations. Hawk

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