Westchester County

MBIA Files RMBS-Related Action Against Morgan Stanley and Affiliates

On December 6, 2010, MBIA Insurance Corp. filed an action against Morgan Stanley and certain of its affiliates in New York State Supreme Court, Westchester County, alleging that Morgan Stanley fraudulently induced MBIA to insure $223 million of RMBS certificates backed by Alt-A loans. MBIA alleges that it has identified loans that breach the representations and warranties made by the defendants in pre-contract negotiations, but that it has been rebuffed in its efforts to have those loans repurchased. MBIA also alleges that the loan pool servicer has failed to undertake appropriate loss mitigation efforts. Complaint.