Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Nye Lavalle
MBIA Inc. has asked Fitch Ratings to withdraw its insurer ratings on six of its units, saying it disagrees with the ratings company's approach.

MBIA spokesman Willard Hill said Fitch's models would require it to put too much capital to back its business of guaranteeing now-troubled structured finance debt, which MBIA intends to separate from its less risky business of insuring municipal bonds.

Mr. Hill also said Fitch doesn't do independent evaluations on a large percentage of the underlying bonds in its portfolio, instead keying its ratings to those of Standard & Poor's and Moody's Investors Service. MBIA thinks those two rating agencies are sufficient, Mr. Hill added.

Bond insurers like industry leader MBIA have been pummeled by investors after straying from their business of guaranteeing principal and interest payments on municipal bonds into the more lucrative but riskier business of backing complicated securities.

Fitch has been the most aggressive of the three main rating agencies in issuing negative assessments of bond insurers. Fitch put MBIA on review for downgrade last month, even after MBIA raised fresh capital to defend its ratings and just three weeks after Fitch itself had affirmed the company's AAA rating with a stable rating.

Fitch said the change stemmed from new projections of higher losses on subprime mortgages. Moody's and S&P have reaffirmed MBIA's insurer ratings at AAA.

Fitch also is the only rating agency to have a rating below AAA assigned to No. 2 bond insurer Ambac Financial Group. Fitch analyst Tom Abruzzo said Friday in an interview that Ambac's efforts to raise $1.5 billion in capital are a step in the right direction, but he noted that it won't get an upgrade back to the top-tier rating unless it reduces the uncertainty about potential losses stemming from exposure to mortgage-backed securities.

MBIA's new chief executive, Jay Brown, has moved quickly to shore up the company's credit ratings and repair its relationship with regulators. The moves include deciding to separate the company's public finance and structured finance operations, suspend writing new insurance on structured finance for six months and eliminating the quarterly dividend.

MBIA's shares were flat at $11.99 in after-hours trading.
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'nuff said.
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