Why The Bond Insurers May Be The Huge Winners From The Brewing Mortgage-Bond Scandal

MBIA Presentation

Photo: Manal Mehta, Branch Hill Capital

MBIA may be a big winner out of the foreclosure bond mess, according to a report from Manal Mehta and Branch Hill Capital, whose negative call on Bank of America is getting tons of attention today..The insurer may be well positioned to benefit from put backs or recissions related to the mortgage bond fallout. What that means is that insurers could recover a great deal of money from banks who misled them about the mortgage backed securities they guaranteed (slide 23).

Bank of America may be forced to buy back the loans MBIA covered, or, at the least, pay back MBIA for all the payments it has made and all future payments on its insurance (slide 26).

Bottom line: MBIA could be set to see its stock price rise dramatically. Today its stock price is up 10.72% (2:20 PM ET).

*Note: This presentation was sent to us by Manal Mehta, and we do not know what positions he, or his firm, have in MBIA or any other mentioned party.

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

Source: Manal Mehta, Branch Hill Capital

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.