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 ($10.63 0.08%) 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 ($8.06 -0.1%), 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.