DC Circuit Affirms Dismissal of MBIA’s Claims Against FDIC in IndyMac Litigation

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On March 8, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s dismissal of MBIA Insurance Corp.’s (MBIA) claims against the Federal Deposition Insurance Corp.’s (FDIC) arising out of mortgage-backed securities backed by IndyMac Bank, F.S.B (IndyMac) loans. The case relates to three securitizations backed by IndyMac loans and supported by MBIA-issued insurance policies. MBIA argued that the FDIC, as conservator of the successor bank to IndyMac, had “approved” IndyMac’s Pooling and Servicing Agreements under FIRREA, and then breached obligations adopted from IndyMac to repurchase loans “put back” from the securitizations. The Court rejected MBIA’s reading of FIRREA, affirming the decision of the district court that approval under the statute required a formal, written acknowledgement. Decision.

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