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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Calculated Risk: MBIA: "Forensic experts reviewing loans"

Now what do you suppose they are going to do when they unearth the biggest insider trader scam ever and find out all those lucrative Credit Default Swaps were rigged bets, knowingly placed while subsidiary servicers busily manufactured mortgage defaults? 
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We have a case for material financial compensation based upon the diligence we have performed so far."


More financial genius.

Perform due dilligence after the deal instead of before it is finalized.

As we know, insurance companies don't like to pay out.  They'll be looking for fraud and any other path to get out of these claims unless they are in it together which could be, I suppose.

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When Mortgage Backed Securities are sold 'Collateral Tapes' are released to ratings agencies and monoline insurers for their use to base ratings and rate risk on. These are electronic files containing a breakdown of all Mortgage Loans in the Securitization.  Due dilligence over "Collateral Tapes" would have given no indication of whatever monkey business servicers were up to prior to and after insurers finalized deals, so I would think insurers would have strong basis for fraud claims, particularly if they can prove complicity between CDS profiteers and servicers.

What I don't know is how "scheme liability" would impact potential cases given recent
Stoneridge Investment Partners LLC v. Scientific Atlanta Inc decision.

Monoline insurers have been taking a huge hosing so I can't yet see where they might be 'in it together'.  They monitor risk and MSF has been out in the open way long enough for them to be knowledgeable of risk it poses to them.  More like $krew me once, shame on you, $krew me twice, shame on me. 

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