Financial Guaranty Insurance Co. says a New York regulator is trying to take it over to supervise the insurer’s bond business.
Benjamin Lawsky, superintendent of the New York State Department of Financial Services, filed a petition with the state Supreme Court to officially obtain control of Financial Guaranty this week.
Specifically, Lawsky asked the court to appoint his office rehabilitator of FGIC and to allow the superintendent to take possession of the firm while giving it power to correct issues at the company. Lawsky’s office had no comment on the matter Tuesday.
New York-based FGIC said on its website that it “has consented to the commencement of the rehabilitation proceeding.” A court hearing will be held on June 28 on the superintendent’s request.
FGIC, as a bond insurer, previously filed suit against ResCap, Ally Financial and Residential Funding Corp. In that lawsuit, which was filed at a New York district court in March, FGIC blamed all of the parties for inducing it to insure mortgage-backed bonds by misrepresenting the underlying quality of the packaged loans.
