Reuters-

The most interesting thing about the new redacted brief for summary judgment that MBIA filed Friday with New York State Supreme Court Justice Eileen Bransten is MBIA’s suggestion that there may be no need for a trial in this 4-year-old slugfest. MBIA’s lead trial lawyer, Philippe Selendy of Quinn Emanuel Urquhart & Sullivan, told Bransten at a hearing last week that Countrywide and its parent, Bank of America, are trying to push the bond insurer “to a precipice where MBIA keeps paying out (on claims by investors in Countrywide mortgage-backed securities) and we have no payments coming in return either from this litigation or through the repurchase process.” Selendy asked Bransten to set a trial date so that Countrywide and BofA can stop stalling. But MBIA’s new brief indicates that Bransten can restore to the bond insurer the $3 billion or so that it has already laid out to investors in MBIA-insured Countrywide mortgage-backed notes just by granting summary judgment on what MBIA describes as Countrywide’s “undisputed breaches.”

Back in January, Bransten ruled that to prevail on its breach-of-contract claims, MBIA would have to show that Countrywide materially misrepresented the quality of the underlying loan pools. In Friday’s brief, MBIA’s Quinn lawyers asserted that the insurer’s review of a 6,000-loan sample showed such obvious breaches in more than half of the sample that even Countrywide can’t contest their materiality. By extrapolation to the entire pool of underlying loans, MBIA argued, Countrywide is liable for deficiencies in 56 percent of the loans underlying the securities it agreed to insure. (MBIA’s redacted brief arguing that BofA is liable as Countrywide’s successor will be filed later this month.)

[REUTERS ON THE CASE]

image: peterjamesthomas.com

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