(Reuters) – MBIA Inc (MBI.N) may pursue a lawsuit accusing Bank of America Corp’s (BAC.N) Countrywide Financial unit of fraudulently misleading it about mortgage securities it insured, costing at least $1.4 billion.
A New York state appeals court in Manhattan agreed with a lower court that MBIA stated a claim for fraud, but that its claim against Countrywide for negligent misrepresentation should be dismissed.
The appeals court also reversed the lower court by throwing out MBIA’s bad faith claim against Countrywide.
Thursday’s ruling came one day after Bank of America, which bought Countrywide for $2.5 billion on July 1, 2008, said it would take more than $20 billion of mortgage-related charges, including to settle disputes and litigation with bond investors and to buy back troubled loans.
