Bank of America (NYSE:BAC) Ruled Against in MBIA Lawsuit

Bank of America (NYSE:BAC) had fought against allowing MBIA Inc. to be able to use statistical sampling in its lawsuit against them, but New York State Supreme Court Judge Eileen Bransten ruled they could go ahead with the procedure.

Bransten said, “The court does not find any prejudice in deciding the motion before it and allowing the use of statistically significant samples of the securitizations at issue.”

Bank of America was also given the right to use their “own sampling chosen in a statistically valid manner."

BofA asserted they believed it was too early in the trial for the sampling to be allowed to go forward.

MBIA requested the sampling method, saying if they had to go through the approximate 368,000 mortgages, it would take them several years to complete the task.

The lawsuit centers around alleged claims from MBIA that they were fraudulently induced to insure $21 billion in mortgage-backed securities.

Essentially that means those receiving the loans shouldn't have been allowed to go forward with them because of numerous failures to meet the underwriting guidelines.

MBIA claims 91 percent of problem loans had discrepancies attached to them.