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MBIA: Mortgage Putback Winner

Following that settlement, MKM Partners analyst Harry Fong said in a report that he no longer believed that Bank of America would settle with MBIA "any time soon." The analyst does believe that a settlement could happen later this year, after Bank of America finishes paying for a previous private label MBS settlement.

MBIA's lawsuit against Bank of America centers on loans that were originally sold by Countrywide Financial, which was acquired by Bank of America in July 2008.

"Bank of America is expected to essentially argue that parent corporations are not liable for the acts of their subsidiaries prior to an acquisition. Successor liability is a critical issue, in our view, and we remain surprised that Bank of America appears willing to risk an adverse ruling," he wrote.

Despite the possibility of a prolonged wait for a settlement with Bank of America, Fong rates MBIA a "buy," with an $18 price target. The analyst estimates that MBIA will earn 35 cents a share this year.

MBI Chart MBI data by YCharts

Interested in more on MIBA? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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