Courtesy of Jaime Falcon.
Flagstar, mortgage lender and user of liars loans (which are pervasively fraudulent) has lost a lawsuit brought by monoline insurer Assured Guaranty. Assured Guaranty specializes in guaranteeing the quality of such loans, once packaged.
This is the same methodology being used in a case against BoA. Judge Rakoff ruled that lender lied 75% of the time to the company that was insuring the quality of their loans.
This is important because BoA could face tens of billions of dollars in liability from other parties if the same methodology is applied.
The insurance companies are relatively modest plaintiffs. If Fannie and Freddie go after lenders, the potential liability is enormous.
