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Bank of America Takes a Hit in Mortgage Lawsuit

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Auburn, NYBank of America recently lost a major ruling in its mortgage lawsuit that will make it more difficult for the bank to defend itself, the Washington Post reports.

Initially, Bank of America had attempted to require that files for each of the 368,000 disputed loans be evaluated individually by the plaintiff, MBIA Insurance. That process would have cost the plaintiff $75 million and would have taken more than four years to complete, the news source said.

MBIA Insurance argued that for Bank of America, it was "the next best thing to avoiding trial altogether."

However, the New York State Supreme Court recently ruled that MBIA can focus on a statistical sample of just 6,000 disputed loans, potentially paving the way for a 2011 trial as originally scheduled, according to the news provider.

MBIA still must prove its case, however, which is something that Bank of America spokesman Jerome F. Dubrowski said "we believe it cannot do."

The case is reportedly at the forefront of a significant battle over troubled mortgages, according to the news provider.


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