MBIA Insurance Settles $28 Billion Mortgage Linked Debt Claims
MBIA Insurance Corporation, based in Armonk, NY, has settled $19 billion in guarantees with five financial institutions since September 2010, resolving their obligations with a one-time payment, according to Bloomberg News. The agreement terminates guarantees on $15.7 billion of debt in the fourth quarter of 2010 and $3.3 billion during the first two months of 2011.
Chief Executive Officer Jay Brown has reportedly settled some $28 billion worth of MBIA’s guarantees on mortgage linked debt and other devalued securities since 2008. The insurer lost its AAA credit rating in 2008 and shut out of guaranteeing municipal bonds as the housing market collapsed and the debt markets froze.