Ambac purchased these loans on the secondary market. In total, Ambac purchased 268,000 loans from Countrywide that were originated in 2004 to 2006. So, this is just a small sample of the total loans purchased. This is also similar to Fannie Mae and Freddie Mac making BofA repurchase loans that were out of compliance.
Ambac has so far reviewed 6,533 Countrywide loans, 97% of which it found did not comply with the failed institution's representations and warranties.
"Countrywide's loans did not bear the represented attributes or conform to Countrywide's own underwriting guidelines," the filing said, "And in many cases were made to borrowers with little or no ability to repay their loans."
Ambac decided to review its portfolio after masses of loans began to default. The filing said that, to date, over 35,000 loans ($1.95 billion) have defaulted or been charged-off, costing Ambac $466 million in claim payments