Banks--- Betting on the recovery Message Board

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

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From: Hawkmoon	5/12/2009 2:14:05 PM
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Some more info on how the Monoline insurers are going to legally negate their obligations to the banks that originated these toxic loans: MBIA CEO Cites ‘Ineligible’ Debt as Source of Relief (Update1) By Jody Shenn May 12 (Bloomberg) -- MBIA Inc. Chief Executive Officer Jay Brown said the largest bond insurer may be able to unwind much of its credit losses because the debt it agreed to back didn’t meet contractual promises. Between about 66 percent and 80 percent of the Armonk, New York-based company’s losses on second-mortgage bonds and mortgage-related collateralized debt obligations, its two worst insurance categories, are tied to collateral that was “ineligible” to be included in the deals, and so its guarantee payouts may be recouped, Brown said today on a conference call. “The rest of the book is actually performing quite well,” he said. MBIA soared 71 percent this year through yesterday on signs the U.S. recession may be easing and as Brown moves to restructure the company and rebuff insurance claims. Brown’s efforts have resulted in lawsuits, both by and against the insurer........................ To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net bloomberg.com

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