Assured sues Credit Suisse over mortgage loan losses
According to the global news agency Reuters, the Credit Suisse Group AG has been sued by Assured Guaranty Ltd over claims that the Swiss bank made false representations about the quality of mortgage loans it insured.
In the complaint, Assured claimed that Credit Suisseâ€™s unit known as DLJ Mortgage Capital was misleading about a total of 7,338 mortgage loans which underlay a number of mortgage-backed securities on offer by Credit Suisse between 2006 and 2007.
Assured Guaranty Ltd, which is owned by the billionaire investor Wilbur Ross, said that it would not have provided insurance to these loans had DLJ been truthful about the quality of them. In addition, Assured alleged that DLJ has so far refused to buy the loans back.
The company is pushing for Credit Suisse to either buy the loans back, or fall back on its professional indemnity insurance to cover the alleged losses incurred by Assured.
In response to the action, a Credit Suisse spokesperson Steven Vames said that the company was planning to vigorously defend the lawsuit. He also said:
“Assured is a sophisticated multibillion dollar insurance company that received full disclosure about the securities they chose to insure,”
Posted by Stephen Heath on October 23, 2011 in News, Professional Indemnity Insurance | Leave a comment |