Ambac sues Bank of America over Countrywide mortgage bonds

Perfect way to start off the New Year!

Reuters-

Ambac Assurance Corp sued Bank of America Corp to recoup hundreds of millions of dollars of losses from insuring roughly $1.68 billion of securities backed at least in part by risky mortgages from the bank's Countrywide Home Loans unit.

In a complaint filed on Tuesday in a New York state court in Manhattan, Ambac accused Countrywide of lying about how well it underwrote so-called "pay option adjustable-rate mortgage negative amortization" loans that backed the securities.

The securities were issued in eight transactions between 2005 and 2007, Ambac said.

[REUTERS]

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