Via: Alison Frankel

In The Matter Of:
ASSURED GUARANTY MUNICIPAL CORP. v
FLAGSTAR BANK, FSB, et al.,
October 10, 2012

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EXCERPT:

…She will testify that she led
10 a team of underwriters and fraud examiners to look at all 800
11 loans in these samples and she checked the results herself in
12 every case against her years of experience.
13 What did she find? That huge numbers of these loans
14 breached the representations and warranties made by Flagstar.
15 In the 2006 transaction, two out of three loans breached those
16 promises. In the 2005 transaction, the number was as high as
17 85 percent.
18 Not only that, but just in instances where there was
19 fraud, where there was evidence outside the loan file that
20 directly contradicted what was in the loan file, that happened
21 a huge amount of time. One in seven loans in 2005, one in five
22 loans in the 2006 sample had evidence of fraud.
[…]

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