Ambac Financial Group Inc. sued Bank of America Corp. over "false and misleading" information it says the bank's Countrywide unit provided to trick it into insuring mortgage-backed bonds.
Ambac filed suit after a review of 6,533 of the home loans - just a fraction of the 268,000 loans included in 12 mortgage-backed securities it insured for Countrywide. The review found more than 97% of the loans didn't meet the guidelines Countrywide had said they'd followed in assembling the bonds, according to the complaint filed Tuesday in New York State Supreme Court.
Under the agreement that Ambac and Countrywide reached as part of the original insurance contract, Ambac said, it has the right to demand that Countrywide fix the problem. Instead, the mortgage lender "implemented a delay-and-defer strategy … requiring Ambac to engage in protracted deliberations" that have so far resulted in Countrywide repurchasing few loans.