MBI - MBIA Inc.

[MYDemaray]

What is the current tally of what MBIA has paid out on Countrywide loans? 

 

Also, what constitutes the difference between MBIA's claims and Joseph Mason's claims as referenced in this article?  Anyone know? http://www.housingwire.com/news/2012/11/16/mbia-claims-could-cost-bofa-well-over-4-billion-rescission-damages

[Capitalist World]

 

Therer is a tremendous amt of info and slide decks here they are slow to load but worth the time

 

http://www.mbia.com/investor/legal_proceedings.html

 

 

 

 

[valuecfa]

 

Therer is a tremendous amt of info and slide decks here they are slow to load but worth the time

 

http://www.mbia.com/investor/legal_proceedings.html

 

Much more detailed info here: http://iapps.courts.state.ny.us/webcivil/FCASSearch?param=P

[MYDemaray]

 

Therer is a tremendous amt of info and slide decks here they are slow to load but worth the time

 

http://www.mbia.com/investor/legal_proceedings.html

 

Thanks.  I'll dig through these but was hoping someone knew off the top of their head.  The numbers I've seen from MBIA are generally presented as "this is what BAC owes us".  And I'm specifically interested in what MBIA has paid out to date.  The reason is, in Flagstar v. AGO, damages were awarded as follows:

 

Therefore, subtracting the amounts Flagstar already paid (which Dr. Mason admitted were left out from his damages calculation), the Court finds that Assured is entitled to collect $89.2 million in damages, plus interest.

 

So, given that the court relied specifically on Dr. Mason's calculation, I'm curious about the exact number paid out by MBIA and what accounts for the discrepancy between MBIA and Dr. Mason in the article I linked to.

[racemize]

 

Therer is a tremendous amt of info and slide decks here they are slow to load but worth the time

 

http://www.mbia.com/investor/legal_proceedings.html

 

Thanks.  I'll dig through these but was hoping someone knew off the top of their head.  The numbers I've seen from MBIA are generally presented as "this is what BAC owes us".  And I'm specifically interested in what MBIA has paid out to date.  The reason is, in Flagstar v. AGO, damages were awarded as follows:

 

Therefore, subtracting the amounts Flagstar already paid (which Dr. Mason admitted were left out from his damages calculation), the Court finds that Assured is entitled to collect $89.2 million in damages, plus interest.

 

So, given that the court relied specifically on Dr. Mason's calculation, I'm curious about the exact number paid out by MBIA and what accounts for the discrepancy between MBIA and Dr. Mason in the article I linked to.

 

I was looking for that number too, given the way the judgement was stated.  Please post if you know!

[valuecfa]

 

Therer is a tremendous amt of info and slide decks here they are slow to load but worth the time

 

http://www.mbia.com/investor/legal_proceedings.html

 

Thanks.  I'll dig through these but was hoping someone knew off the top of their head.  The numbers I've seen from MBIA are generally presented as "this is what BAC owes us".  And I'm specifically interested in what MBIA has paid out to date.  The reason is, in Flagstar v. AGO, damages were awarded as follows:

 

Therefore, subtracting the amounts Flagstar already paid (which Dr. Mason admitted were left out from his damages calculation), the Court finds that Assured is entitled to collect $89.2 million in damages, plus interest.

 

So, given that the court relied specifically on Dr. Mason's calculation, I'm curious about the exact number paid out by MBIA and what accounts for the discrepancy between MBIA and Dr. Mason in the article I linked to.

 

I was looking for that number too, given the way the judgement was stated.  Please post if you know!

 

It's all there in the court filings for those who take the time to read them. MBIA had paid out about 3 and half billion in CW claims (and counting) as of the last reference point in the litigation. Who knows what the final number will be.

 

Also, MBIA is pursuing fraud claims.

[MYDemaray]

Also, MBIA is pursuing fraud claims.

 

As was AGO no? Rakoff limited damages to amount paid + interest + lawyers fees.

[valuecfa]

Also, MBIA is pursuing fraud claims.

 

As was AGO no? Rakoff limited damages to amount paid + interest + lawyers fees.

 

No they weren't.

[MYDemaray]

valuecfa -- thanks for your replies...I know you've read through this stuff, and I appreciate your making the process easier for me.  Do you know if the MBIA contracts contained similar language to AGO v. Flagstar's "cure or repurchase as sole remedy".  Curious to know if MBIA's fraud claims will be dismissed on these grounds?

 

Honestly, I don't see how BAC doesn't settle this quickly after this ruling.

[valuecfa]

valuecfa -- thanks for your replies...I know you've read through this stuff, and I appreciate your making the process easier for me.  Do you know if the MBIA contracts contained similar language to AGO v. Flagstar's "cure or repurchase as sole remedy".  Curious to know if MBIA's fraud claims will be dismissed on these grounds?

 

Honestly, I don't see how BAC doesn't settle this quickly after this ruling.

 

Yes. they contain sole remedy language as well. BAC has been trying to use this language to assist it in various respects, most recently for its summary judgement motion. It hasn't helped throughout the case, and IMO will continue to be a fruitless pursuit.

[valuecfa]

In its most recent support for summary judgegment letter to the court today, MBIA makes Bransten aware of the Rakoff  ruling and the the various similarities it has to its own case against Countrywide.

 

 

February 11, 2013

philippeselendy@quinnemanuel.com

BY E-MAIL AND BY HAND

Hon. Eileen Bransten

New York Supreme Court

60 Centre Street, Room 442

New York, NY 10007

Re: MBIA Insurance Corporation v. Countrywide Home Loans, Inc., et al., Index No.

602825/2008

Dear Justice Bransten:

We represent Plaintiff MBIA Insurance Corporation ("MBIA") in the above-captioned

action, and write to bring to the Court's attention the Findings of Fact, Conclusions of Law, and

Order recently issued by Judge Rakoff of the Southern District of New York in Assured

Guaranty Municipal Corp. v. Flagstar Bank, F.S.B., 11-CV-2375, -- F. Supp. 2d --, 2013 WL

440114 (S.D.N.Y. Feb. 5, 2013). This comprehensive decision was issued after a bench trial on

the merits of a monoline insurer's ("Assured") claims arising out of defendant bank's

("Flagstar") pervasive breaches of representations and warranties in two residential mortgage

backed securitizations. The decision awarded Assured damages of $90.1 million (essentially the

entire amount of the claim) plus contractual interest and attorneys' fees and costs. The decision

bears directly on numerous issues raised in MBIA's Motion for Summary Judgment on Breach

of the Insurance Agreements (Mot. Seq. No. 58), Countrywide's Motion for Summary Judgment

(Mot. Seq. No. 57) and Countrywide's Motion to Strike the Butler Reunderwriting Report, the

Butler Rebuttal Report, and the Butler Affidavit (Mot. Seq. No. 62), all currently pending before

this Court, and strongly supports MBIA's position on those motions.

Specifically, Judge Rakoff held that:

 

...too long to copy and paste (44 pages long)...

[racemize]

In its most recent support for summary judgegment letter to the court today, MBIA makes Bransten aware of the Rakoff  ruling and the the various similarities it has to its own case against Countrywide.

 

 

February 11, 2013

philippeselendy@quinnemanuel.com

BY E-MAIL AND BY HAND

Hon. Eileen Bransten

New York Supreme Court

60 Centre Street, Room 442

New York, NY 10007

Re: MBIA Insurance Corporation v. Countrywide Home Loans, Inc., et al., Index No.

602825/2008

Dear Justice Bransten:

We represent Plaintiff MBIA Insurance Corporation ("MBIA") in the above-captioned

action, and write to bring to the Court's attention the Findings of Fact, Conclusions of Law, and

Order recently issued by Judge Rakoff of the Southern District of New York in Assured

Guaranty Municipal Corp. v. Flagstar Bank, F.S.B., 11-CV-2375, -- F. Supp. 2d --, 2013 WL

440114 (S.D.N.Y. Feb. 5, 2013). This comprehensive decision was issued after a bench trial on

the merits of a monoline insurer's ("Assured") claims arising out of defendant bank's

("Flagstar") pervasive breaches of representations and warranties in two residential mortgage

backed securitizations. The decision awarded Assured damages of $90.1 million (essentially the

entire amount of the claim) plus contractual interest and attorneys' fees and costs. The decision

bears directly on numerous issues raised in MBIA's Motion for Summary Judgment on Breach

of the Insurance Agreements (Mot. Seq. No. 58), Countrywide's Motion for Summary Judgment

(Mot. Seq. No. 57) and Countrywide's Motion to Strike the Butler Reunderwriting Report, the

Butler Rebuttal Report, and the Butler Affidavit (Mot. Seq. No. 62), all currently pending before

this Court, and strongly supports MBIA's position on those motions.

Specifically, Judge Rakoff held that:

 

...too long to copy and paste (44 pages long)...

 

Is there a public link to this?

[mcristo]

https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=sGxmJuzDsOSniptO/bj_PLUS_mQ==&system=prod

 

[Cardboard]

We keep hearing and waiting for a potential settlement, but is there not a point when we can expect the judges to finally do their job and provide their judgement? I mean Kapnick had since June or something and Bransteen must be about done by now, no?

 

Cardboard

[txlaw]

In its most recent support for summary judgegment letter to the court today, MBIA makes Bransten aware of the Rakoff  ruling and the the various similarities it has to its own case against Countrywide.

 

 

February 11, 2013

philippeselendy@quinnemanuel.com

BY E-MAIL AND BY HAND

Hon. Eileen Bransten

New York Supreme Court

60 Centre Street, Room 442

New York, NY 10007

Re: MBIA Insurance Corporation v. Countrywide Home Loans, Inc., et al., Index No.

602825/2008

Dear Justice Bransten:

We represent Plaintiff MBIA Insurance Corporation ("MBIA") in the above-captioned

action, and write to bring to the Court's attention the Findings of Fact, Conclusions of Law, and

Order recently issued by Judge Rakoff of the Southern District of New York in Assured

Guaranty Municipal Corp. v. Flagstar Bank, F.S.B., 11-CV-2375, -- F. Supp. 2d --, 2013 WL

440114 (S.D.N.Y. Feb. 5, 2013). This comprehensive decision was issued after a bench trial on

the merits of a monoline insurer's ("Assured") claims arising out of defendant bank's

("Flagstar") pervasive breaches of representations and warranties in two residential mortgage

backed securitizations. The decision awarded Assured damages of $90.1 million (essentially the

entire amount of the claim) plus contractual interest and attorneys' fees and costs. The decision

bears directly on numerous issues raised in MBIA's Motion for Summary Judgment on Breach

of the Insurance Agreements (Mot. Seq. No. 58), Countrywide's Motion for Summary Judgment

(Mot. Seq. No. 57) and Countrywide's Motion to Strike the Butler Reunderwriting Report, the

Butler Rebuttal Report, and the Butler Affidavit (Mot. Seq. No. 62), all currently pending before

this Court, and strongly supports MBIA's position on those motions.

Specifically, Judge Rakoff held that:

 

...too long to copy and paste (44 pages long)...

 

Is there a public link to this?

 

You can also take a look at MBIA's IR site.  They post these things on the lawsuit related section.

[muscleman]

We keep hearing and waiting for a potential settlement, but is there not a point when we can expect the judges to finally do their job and provide their judgement? I mean Kapnick had since June or something and Bransteen must be about done by now, no?

 

Cardboard

 

I was eager to hear from that. But as time pass by, I start to think maybe the judge won't rule until the other case  gets settled too.

You see, as soon as she rules, BAC will appeal. If she doesn't rule, BAC cannot appeal.

I think she will rule on the next day when the other case announced the ruling.

[Cardboard]

I am probably too ignorant on how the judicial system works but, since when is a judge afraid of their judgement being appealed? It simply creates a precedent and then a party is sometimes allowed to contest it in the appeal court.

 

Especially with the article 78 proceedings or the one under Kapnick, it is almost like she is telling them and what some of you are inferring: "Are you settling? I am about to release my ruling you know..."

 

In reality, I don't think that this is happening at all. Again, maybe that I fail to understand how justice works, but a judge would seem much more independent than that I would think. I sense that she is afraid to release her judgement because it will create some kind of precedent that she doesn't want out there. What could that be? She said that it would take time, but since June tells me that there is something else going on that I don't really get.

 

Cardboard

[MYDemaray]

These judges are busier than you can imagine. I heard a figure recently that one of these more prominent judges (Rakoff?) had nearly 200 cases in front of him.  I continue to be amazed at the quality of produced by these judges with such a heavy workload (I know... they have clerks, but still).  While we obsess over a single case, they have to juggle multiples of that.

[Kraven]

Interesting article.  http://www.forbes.com/sites/danielfisher/2013/02/13/billion-dollar-game-of-chicken/  Between the lines seems to imply a settlement is near.  Of course it's been near for a long time.

[muscleman]

Interesting article.  http://www.forbes.com/sites/danielfisher/2013/02/13/billion-dollar-game-of-chicken/  Between the lines seems to imply a settlement is near.  Of course it's been near for a long time.

 

Article 77 maybe different from the AGO vs FlagStar case, or the MBI vs BAC case.

It is already settled by the trustee, and I heard from my friend (who is a BAC holder) said that it is extremely difficult to prove a trustee's action is wrong.

 

If BAC loses Article 77, the potential effect is a wipe out for BAC shareholders. Why would Bruce Berkowitz long both MBI and BAC? I think he is expecting a win for MBI vs BAC, and a lose for Article 77's plaintiff. Anyone who understands Article 77 please share your thoughts. :)

[Cardboard]

Sorry Muscleman, but I will defer to someone else to enlighten you on that. What is clear however, is that Brian Moynihan is showing very poor judgement on what is a pretty straightforward thing and I am starting to seriously question my very large position in BAC (over twice as large as MBIA), especially approaching tangible book value.

 

Here we have a case where every court ruling, that I am aware of, has gone in favour of monoline insurers. None has been positive to the banks. Maybe that I am missing a little one out there, please tell me. In the MBIA case vs BAC, both judges or Kapnick and Bransteen have demonstrated impatience with BAC and have shown based on their languages in the various hearings that they are leaning towards MBIA. The only potential leverage that BAC has left is to drag this as long as possible to make MBIA as weak financially as possible and to extract a lower settlement.

 

Regarding the size of the settlement, it is also very clear that it cannot be the same percentage that was paid to Assured Guaranty or other monolines in the past. A year ago, yes. Today, with all the victories in court by various players, it is clear that MBIA has a very serious chance to win and even get punitive damage. The latest Flagstar vs Assured case also shows that the cost for settlement is now up from before due to more discovery and precedents. Remember also that in that case that there was no fraudulent charge being raised that I am aware of.

 

Like Ericopoly said, these lawsuits are not "material" to BAC, but what is the point of dragging this forever when you know that you will eventually lose and likely open up a big can of worms? This is especially troubling considering that BAC is trying to get back in good terms with regulators to hopefully increase the dividend and carrying this lawsuit risk is not something that helps get a better credit rating. So we are likely losing a ton of money due to lawyers, credit cost and potentially lost opportunities because we keep carrying this risk to save a few bucks down the road. That is really poor judgement.

 

Other than implementing cost savings and hoarding capital, which is right, Moynihan has done very little that another manager could not have done. Seeing this lack of judgement regarding MBIA, I wonder how is he going to be able to spot risks and trouble down the road at the bank or like a Jamie Dimon has been able to do by avoiding subprime before the crisis.

 

Cardboard

 

[muscleman]

Sorry Muscleman, but I will defer to someone else to enlighten you on that. What is clear however, is that Brian Moynihan is showing very poor judgement on what is a pretty straightforward thing and I am starting to seriously question my very large position in BAC (over twice as large as MBIA), especially approaching tangible book value.

 

Here we have a case where every court ruling, that I am aware of, has gone in favour of monoline insurers. None has been positive to the banks. Maybe that I am missing a little one out there, please tell me. In the MBIA case vs BAC, both judges or Kapnick and Bransteen have demonstrated impatience with BAC and have shown based on their languages in the various hearings that they are leaning towards MBIA. The only potential leverage that BAC has left is to drag this as long as possible to make MBIA as weak financially as possible and to extract a lower settlement.

 

Regarding the size of the settlement, it is also very clear that it cannot be the same percentage that was paid to Assured Guaranty or other monolines in the past. A year ago, yes. Today, with all the victories in court by various players, it is clear that MBIA has a very serious chance to win and even get punitive damage. The latest Flagstar vs Assured case also shows that the cost for settlement is now up from before due to more discovery and precedents. Remember also that in that case that there was no fraudulent charge being raised that I am aware of.

 

Like Ericopoly said, these lawsuits are not "material" to BAC, but what is the point of dragging this forever when you know that you will eventually lose and likely open up a big can of worms? This is especially troubling considering that BAC is trying to get back in good terms with regulators to hopefully increase the dividend and carrying this lawsuit risk is not something that helps get a better credit rating. So we are likely losing a ton of money due to lawyers, credit cost and potentially lost opportunities because we keep carrying this risk to save a few bucks down the road. That is really poor judgement.

 

Other than implementing cost savings and hoarding capital, which is right, Moynihan has done very little that another manager could not have done. Seeing this lack of judgement regarding MBIA, I wonder how is he going to be able to spot risks and trouble down the road at the bank or like a Jamie Dimon has been able to do by avoiding subprime before the crisis.

 

Cardboard

 

 

I totally agree with you! I am not a BAC holder so I am don't care that much about Article 77, but still would like to learn.

I agree that BAC CEO is playing a dangerous game right now.

Do you know when will the judge rule on the SJ of successor liability? Is it possible that the judge doesn't rule on that, but instead hold a hearing for it? So it is like, we need to wait for 2 months before the hearing happens, and then another 4 months before the judge rules for the hearing, and then another 5 months before the actual trial happens for the MBI vs BAC litigation? If that is the case, I don't see how it could finish by the end of this year. Time flies.

[MYDemaray]

BAC's game may not be as dangerous as some suppose.  First, Rakoff limited damages to claims paid by AGO + interest + legal fees.  So, from that perspective, BAC now has a potential downside figure.

 

Second, does anyone know if the pooling and servicing agreements require all investors be treated equally? I just pulled up a PSA to have a look, but suppose for a second that the Gibbs and Bruns settlement fails in the Article 77 hearing.  Does anything preclude BAC from renegotiating the settlement only with the Investor Group that had more than 25% of the trusts? (Only 14% of total face value) In such a scenario, BAC could settle for less than $8.5bn, and the remaining 86% of holders would be left with nothing, due to less than 25% ownership to direct the trustee and lapse of statute of repose.  This would be a better outcome for BAC, and their MBIA exposure would be unchanged.  MBIA would still get paid, but it makes the matter a lot less urgent for BAC, than Herceza and Palmer are suggesting.  Anyone know if this is possible?

[Cardboard]

BAC for the past 3 years has filled its 10K between Feb 23 and Feb 26. MBI does it between Feb 29 and the first few days of March. It is the perfect time for both companies to get this cleaned up.

 

We may be close.

 

Cardboard

[muscleman]

BAC's game may not be as dangerous as some suppose.  First, Rakoff limited damages to claims paid by AGO + interest + legal fees.  So, from that perspective, BAC now has a potential downside figure.

 

Second, does anyone know if the pooling and servicing agreements require all investors be treated equally? I just pulled up a PSA to have a look, but suppose for a second that the Gibbs and Bruns settlement fails in the Article 77 hearing.  Does anything preclude BAC from renegotiating the settlement only with the Investor Group that had more than 25% of the trusts? (Only 14% of total face value) In such a scenario, BAC could settle for less than $8.5bn, and the remaining 86% of holders would be left with nothing, due to less than 25% ownership to direct the trustee and lapse of statute of repose.  This would be a better outcome for BAC, and their MBIA exposure would be unchanged.  MBIA would still get paid, but it makes the matter a lot less urgent for BAC, than Herceza and Palmer are suggesting.  Anyone know if this is possible?

 

That is the best case scenario. For the worst case scenario, BAC needs to pay 100% of the actuall losses+interest+legal fees, which accounts to over $200 bn in the Article 77 case.

Again, I am not very familiar with Article 77 so I can't say if that $200 bn is realistic at all. But even if there is only 5% probability for this outcome, this would still be a huge threat on BAC's existence.