HAMILTON, Bermuda--(BUSINESS WIRE)--Following the decision by Judge Jed S. Rakoff of the United States District Court for the Southern District of New York in Assured Guaranty’s case seeking recoveries from Flagstar Bank for breaches of representations and warranties (R&W) in insured residential mortgage-backed securities (RMBS), Assured Guaranty Ltd. President and CEO Dominic Frederico said:
“Judge Rakoff gave us an important victory, awarding us substantially all the damages we had sought, including approximately $90 million as compensation for claims paid, as well as interest, costs and attorneys’ fees still to be determined. This is the first trial related to RMBS R&W putbacks that has come to a final court ruling, and it sets a strong precedent in support of the rights of Assured Guaranty in these cases. The court recognized and clearly articulated the responsibility of an R&W provider to honor its contractual obligations to purchase defective mortgage loans.”
The decision is consistent with preliminary rulings from other courts in legal actions that have called on RMBS R&W providers to take responsibility for contractual commitments.
“His decision establishes clear liability as it relates to originators and securitizers of RMBS transactions and strengthens Assured Guaranty’s resolve to seek full recovery from R&W providers that refuse to recognize this liability,” added Mr. Frederico.
Assured Guaranty Ltd. (together with its subsidiaries, Assured Guaranty or the Company) is a publicly traded Bermuda-based holding company. Its operating subsidiaries provide credit enhancement products to the U.S. and international public finance, infrastructure and structured finance markets. More information on Assured Guaranty and its subsidiaries can be found at assuredguaranty.com.
Cautionary Statement Regarding Forward-Looking Statements:
Any forward-looking statements made in this press release reflect the Company's current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. For example, Assured Guaranty's ability to realize insurance loss recoveries or damages from originators, sellers, sponsors, underwriters or servicers of RMBS transactions could be affected by the ability or willingness of these parties to make such payments and other risk factors identified in Assured Guaranty's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of February 5, 2013, and Assured Guaranty undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.