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MBIA Inc. Message Board

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  • nilsdegraaf nilsdegraaf Dec 17, 2009 12:01 PM Flag

    Credit Suisse Sued By MBIA Over Mortgage-Backed Securities

    I would recommend everyone to read the court complaint. CS has no chance.

    http://www.mbia.com/investor/publications/603751-09-complaint.pdf

    From a random sample of loans 79% of the loans had breaches of reps & warranties. From a sample of defaulted loans 87% had breaches.

    2000 files of defaulted loans were passed on to a third party without the right to do so.

    I would be surprised if MBIA will not get compensated for the full 100%.

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    • The lawsuit information you are citing is quite obviously being absorbed by the market, and the market seems substantially less certain than you.

      I do think it is important information, but it is also incomplete, and your speculation of 100% put backs seems a bit premature. On top of that, you have not heard the defense.

      An amazing thing happens when you read a plaintiffs case without knowing the defense - it always sounds great. Very few attorneys file completely frivolous lawsuits...most seem very sound - at least until the defense is put up.

      One of the obvious ways to get a guage on how important this information is would be to have similar data compiled for say 2003-2005 or some other set of years prior to the fraud tipping point in the post 2005 era...

      I doubt that the breaches will be at the same high level, but I wouldn't be surprised if they were very high. And perhaps high enough to show that MBIA happily looked the other way at breaches during the pre-crash period.

      I don't begrudge fools to have one-sided views of the world...that is the nature of the fool. But others might want to look at all possibilities.

      jbd.

      • 1 Reply to johnny_bdog
      • "One of the obvious ways to get a gauge on how important this information is would be to have similar data compiled for say 2003-2005 or some other set of years prior......I doubt that the breaches will be at the same high level, but I wouldn't be surprised if they were very high."

        Okay, so per JBD's advice Credit Suisse's lawyers should mount a defense along these lines: "Judge, please look at the history in this case. The fact is we've been lying and deceiving our clients for a long time. In fact, we've never done the due diligence we were paid to do. But why punish us now after all this time?"

        Truly hilarious. Obviously, JBD is running really low on material these days....

 
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