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MBIA Fighting Over Stripper Loans

Topless strippers

... According the filings, the applicaton was for a "stated income loan," which didn't require the "adult entertainer" to document her earnings, but left the underwriters free to put on their thinking caps and voice any concerns.

The filings, which are located on MBIA's Web site, say that then appraised of suspicions over the amount of the applicant's stated income, a Credit Suisse employee said in an email "entertainers typically operate in cash. Its high end club in charlotte. Not the pink pony in backwoods area. Its Upscale. Ask mahar hahaha" ...

... When reviewing a delinquent mortgage loan, it's not surprising to discover sloppy underwriting, insufficient documentation or a silly credit policy to begin with, but the surprising thing about MBIA's putback claim against Credit Suisse is the high percentage of loans that the insurer claims violated the representations and warranties of Credit Suisse unit DLJ Mortgage Capital.

MIBA claims that through "October 31, 2009, loans representing more than 51% of the original loan balance" that the insurer guaranteed for Credit Suisse in April 2007, "or "approximately 464 million," had "defaulted and been charged-off, requiring MBIA to make $296 million in claim payments." ...

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