Bear Stearns’ failure to inform the company insuring a $1.2 billion portfolio of mortgage-backed securitizations about “significant problems” in the loan collateral pool could signal a contractual breach that supports a fraud claim, a Westchester County Supreme Court judge has ruled.
In a May 6 decision, Westchester Commercial Division Justice Alan Scheinkman (See Profile) dismissed without prejudice MBIA Insurance’s $168 million fraud action against J.P. Morgan as successor-in-interest to Bear Stearns, whose 2008 collapse was tied to subprime mortgage lending.
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