Bond insurer Assured Guaranty (AGO) is one of several firms that ended up filing lawsuits against banks for failing to represent the underlying collateral tied to mortgage bonds guaranteed by private insurers.
Now the insurer is getting its first day in court against Michigan bank Flagstar Bancorp Inc. (FBC), according to Reuters news.
The case is being watched closely since it could serve as a benchmark for what type of settlements or verdicts will erupt from situations where a bond insurer pushes back against parties that packaged and sold securities, using the backing of private insurance firms.
Assured is seeking $108 million in a breach of contract case on $900 million in securities that it guaranteed, Reuters said.
This is not the first time Assured has filed suit over RMBS bonds that it insured. The bank has active litigation against UBS, OneWest Bank and other financial firms.
