It's hard to keep up with all of the developments in the residential-mortgage backed securities related lawsuits plaguing Bank of America [stock BAC] [/stock] today.

First, you have the New York's Attorney General questioning an $8.5 billion proposed settlement between Bank of America and an investors Trust over Countrywide loans that were packed into RMBS pools and sold off to bond investors.

At the same time, bond insurer MBIA – the monoline on the hook for failed Countrywide loans backing mortgage bonds – is suing BofA, alleging the Countrywide loans it insured contained misrepresentations about the condition of those loans, leaving MBIA unwittingly on the hook for losses on eventual defaults.

The only problem, says Manal Mehta with Sunesis Capital,is that it looks like in defending itself in the MBIA case this week, BofA may have tipped its hat to New York attorney general Eric Schneiderman and other investors who are accusing Countrywide (now part of BofA) of knowingly selling off toxic securitized loans. BofA acquired Countrywide and its mortgage legacy issues in 2008.

"In a truly bizarre motion for summary judgment, Bank of America made a startling admission that, on average, 29.4% of loans included in Countrywide securitizations failed to meet representation and warranties in the MBS prospectus," Mehta claims.

"Bank of America uses this tortured logic to somehow suggest 'buyers beware' - counterparties should have known Countrywide was a factory for fraud. While this logic may have been tailored towards battle with a particular counterparty, MBIA, Attorney General Schneiderman and the Federal Mortgage task force should have a relatively straightforward case to make against the bank using their own plain, simple and irrefutable language - that most of the mortgages which were securitized during the housing boom were defective," Mehta added.

BofA says in its own motion that "it's undisputed that Countrywide shared with MBIA detailed spreadsheets containing the due diligence firms' findings with respect to each and every loan reviewed, as well as Countrywide's decisions about which loans to exclude and why. But MBIA does not appear to have placed much, if any, importance on these due diligence results in deciding to insure the securitizations."

Essentially, Mehta says the bank's motion for dismissal in the MBIA case uses the logic that MBIA should have known some of the loans were not perfect because there was evidence already proving that point early on. Yet, he sees this as a problem when it comes to other RMBS litigation because in order for MBIA to be on notice of potential loan defects, those defects would have to have been apparent to all of the litigating parties years ago.