NEW YORK, April 2 (Reuters) – A New York state appeals court on Tuesday cleared the way for bond insurer MBIA Inc to pursue a fraud lawsuit against Bank of America Corp over toxic mortgage securities.
A panel of New York's Appellate Division said MBIA did not need to wait for loans to go into default before it could force Bank of America to buy them back.
The panel also said MBIA need not meet a particularly high burden of proof to show fraud at the former Countrywide Financial Corp, which Bank of America bought in 2008.
The panel, did, however, eliminate one means for MBIA to recover damages from Bank of America, the second-largest U.S. bank.
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