The controversial MBIA v. Countrywide Home Loans case is becoming more heated. Bloomberg, a news wire service, asked a New York court to unseal confidential Countrywide documents that could shed light on fraud claims stemming from mortgages originated by the subprime lender, and later issued as mortgage-backed securities. MBIA is a bond insurer.

Bloomberg wrote in its filing with a New York state court that "the materials sought to be unsealed involve issues of prime importance to public interest, including ... allegations of fraud and misconduct regarding mortgage-backed securities, allegations regarding compliance — or lack thereof — with underwriting standards and guidelines for mortgages."

By injecting itself in the case, Bloomberg essentially supports mortgage insurer MBIA (MBI) in its motion to compel the court to unseal certain documents that they believe could provide insight into what happened at Countrywide, now Bank of America (BAC), prior to the 2008 financial meltdown. Bank of America acquired Countrywide in 2008, taking over its legacy mortgage assets and assuming responsibility for ongoing litigation against Countrywide.

MBIA, which is suing Countrywide over losses tied to insurance coverage it provided on Countrywide loans, wants the documents de-classified so the plaintiffs and news media can investigate how the origination and sale of Countrywide mortgages were handled before the subprime crisis.

Bloomberg argues that millions of pages of potential home loan data is now designated as confidential or highly confidential, making it impossible for the plaintiff, MBIA, or news agencies to review the documents.

kpanchuk@housingwire.com