The New York Supreme Court ruled that rating agencies must produce internal documents pertaining to securities issued by Countrywide Home Loans Inc. and insured by MBIA Insurance Corp.
MBIA Insurance asked that both Standard & Poor's and Moody's Investors Service produce internal communications regarding the 15 securitizations at issue in the lawsuit filed by MBIA against Countrywide, and the rating agencies resisted.
In the document filed Tuesday, MBIA contends that the rating agencies are in possession of internal communications regarding the agencies' evaluations and ratings of the securitizations.
MBIA asserts the rating agencies' internal communications directly relate to "shadow ratings" the raters gave to Countrywide.
MBIA claims that Countrywide then gave those documents to MBIA and that MBIA relied upon those ratings both in its evaluations of the quality of the loans and in its decisions to insure those securities.
In the filing, Judge Eileen Bransten wrote: "MBIA has shown that the internal documents of the rating agencies pertaining to the securitizations are material and necessary to its claims and its defenses," and that "the rating agencies have not shown that the requested productions is burdensome."
Spokespersons for MBIA declined to comment, while Moody's and Standard & Poor's did not return calls seeking comment by press time.
