Bank Of America Suing Old Republic Over Mortgage Insurance
November 10 2010 - 5:40PM
Dow Jones News
Bank of America Corp. (BAC) is suing insurer Old Republic
International Corp. (ORI), alleging the insurance company is
denying the bank hundreds of millions of dollars in "valid mortgage
insurance claims."
The lawsuit, filed last week in federal court in Charlotte,
N.C., says that Old Republic is rejecting the bank's insurance
claims on soured home-equity loans based on "unreasonable
interpretations" of the language in their contracts.
A spokesperson for Old Republic wasn't immediately available for
comment Wednesday.
Bank of America is seeking damages in excess of $160 million
from the court. The bank says it has paid over $40 million in
premiums for the insurance.
The bank alleges that when the housing crisis began, its claims
to Old Republic increased, but Old Republic is claiming it "did not
understand the risk involved" in the policies and denied claims.
The suit says $31 million in claims have been rejected and another
$28 million in claims have been filed.
"In more prosperous times, Old Republic reaped hundreds of
millions of dollars through its participation in the home mortgage
market," the suit says. "Old Republic now, however, faces the
reality of steep financial losses because of a significant economic
downturn and has failed to pay claims in accordance with the
mortgage insurance policy that it issued."
-By David Benoit, Dow Jones Newswires; 212-416-2458;
david.benoit@dowjones.com
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