Ambac Financial Group‘s main operating unit is reviewing a number of loans included in residential mortgage-backed securities it insures to see if there are “breaches of representations and warranties made by the sponsors of such securities” when they were issued. The bond insurer also sued another handful of trusts, including many Countrywide entities, that sold MBS, claiming the sponsors of the debt misrepresented the securities at the time of the sale. Ambac said in a filing with the Securities and Exchange Commission that it feels entitled to some form of restitution from the issuers of the debt. The company also plans to seek repurchase of many of the loans included in the RMBS. Earlier in November, Ambac filed for Chapter 11 bankruptcy protection after its board chose not to pay an interest payment that triggers default and allow noteholders to call the debt. At June 30, the company listed total debt outstanding of $1.6 billion. The company also sued the Internal Revenue Service this month, asking the courts to block the seizure of $700 million of tax refunds. Reuters reported that another hearing on this matter is set for Nov. 30. Ambac’s stock, which now trades on the Pink Sheets at less than a penny, reached an all-time high of $96.08 on May 18, 2007. Write to Jason Philyaw.