MBIA (MBI) Dips; Speculation Surrounds Seizure of Insurance Unit (BAC)
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MBIA, Inc. (NYSE: MBI) is lower Thursday amid reports that it's mortgage insurance arm might be seized by regulators within "weeks or days."
According to a report in the NY Post earlier, New York Department of Financial Services superintendent Benjamin Lawsky might move soon with MBIA Insurance quickly running out of cash. The unit has filed lawsuits against Bank of America (NYSE: BAC) and its Countrywide unit, along with ResCap, alleging mortgage-backed securities it bought weren't valued correctly and it should be repaid the difference.
Some have raised questions about why Lawsky didn't seize MBIA Insurance sooner. Peers AMBAC and FGIC both had more assets than the MBIA unit before being seized. His predecessor approved a split of MBIA into its current mortgage and municipal bond units. Any move now could strengthen BofA's case against MBIA, with BofA claiming at assets were "improperly transferred" out of the unit.
Shares are down 5 percent, having pared earlier losses.
According to a report in the NY Post earlier, New York Department of Financial Services superintendent Benjamin Lawsky might move soon with MBIA Insurance quickly running out of cash. The unit has filed lawsuits against Bank of America (NYSE: BAC) and its Countrywide unit, along with ResCap, alleging mortgage-backed securities it bought weren't valued correctly and it should be repaid the difference.
Some have raised questions about why Lawsky didn't seize MBIA Insurance sooner. Peers AMBAC and FGIC both had more assets than the MBIA unit before being seized. His predecessor approved a split of MBIA into its current mortgage and municipal bond units. Any move now could strengthen BofA's case against MBIA, with BofA claiming at assets were "improperly transferred" out of the unit.
Shares are down 5 percent, having pared earlier losses.
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