Financial Guaranty sues Ally Financial over bad loans
Ally Financial Inc. was sued by Financial Guaranty Insurance Co. over soured mortgage loans backing securities sold to investors and insured by Financial Guaranty.
Ally’s Residential Funding unit made “material misrepresentations” about the loans, which were riskier than promised, Financial Guaranty said in two lawsuits filed Tuesday in New York State Supreme Court in Manhattan.
“The levels of defaults and losses, and therefore the amount of claims presented to FGIC, have been overwhelming,” the company said in court papers.
The lawsuits involve insurance policies issued by Financial Guaranty in connection with about $1.9 billion in mortgage- backed securities, according to court papers. FGIC Corp., the New York-based holding company for Financial Guaranty, filed for bankruptcy in 2010. Financial Guaranty previously sued Ally units in November.
Gina Proia, a spokeswoman for Detroit-based Ally, didn’t immediately respond to an e-mail seeking comment on the lawsuits.
Article source: http://www.detroitnews.com/article/20111228/BIZ/112280393/1001/rss21
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