Syncora Holdings today announced that its wholly owned, New York financial guarantee insurance subsidiary, Syncora Guarantee, settled its residential mortgage-backed securitization related claims with JPMorgan Chase (JPM).
Syncora is to receive a cash settlement, estimated to be around $400 million.
However, the settlement from JPM does not make Syncora whole.
The Bermuda-based company is struggling in the current operating environment.
“Despite these developments and the change in the going concern assessment, the Company continues to face significant risks and uncertainties as described in the Company’s financial statements,” Syncora said in a statement.
According to coverage in Reuters, “home loans such as those issued by the Bear Stearns ‘securitization machine,’ as the bond insurer’s lawsuits have called it, were at the center of the financial crisis. As the loans became delinquent, mortgage-backed securities collapsed, helping to trigger a wider market meltdown.”