MBIA Settles With Bank of America

Posted by Orb Staff on May 07, 2013 No Comments
Categories : Residential Mortgage

MBIA Inc. and its subsidiaries have finalized a settlement agreement with Bank of America Corp., whereby MBIA will receive a net payment of approximately $1.7 billion and, in turn, dismiss litigation it initiated in September 2008 against Countrywide Home Loans Inc., which BofA later acquired.

‘We are very pleased to have reached a comprehensive settlement agreement with Bank of America that improves the outlook for MBIA Insurance Corp.,’ says Jay Brown, MBIA's CEO. ‘I appreciate Bank of America's efforts to arrive at a fair agreement that resolves a number of legacy issues for both institutions.’

Bank of America and MBIA have also agreed to the commutation of all of the MBIA policies held by Bank of America, which have a notional insured amount of approximately $7.4 billion, and of which $6.1 billion are policies insuring credit default swaps held by Bank of America referencing commercial real estate exposures. MBIA will have no further payment obligations under the commuted policies.

MBIA is a holding company whose subsidiaries provide financial guarantee insurance, as well as related reinsurance, advisory and portfolio services, for the public and structured finance markets.

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