Credit Switzerland settled in case of mortgage with the bond Ambac insurer

NEW YORK (Reuters) - Credit Switzerland Group AG moved that an action brought by insurer binding Ambac Financial Group Inc. over false statements on securities backed by mortgages that Ambac insured in 2007, according to court documents and a source close to the case.

The terms of the settlement were not made public.

Trial of AMBAC said Credit Switzerland Securities, as well as subsidiary Capital mortgage of DLJ, misled the insurer on a pool of more than 2,000 home equity lines of credit with a balance of approximately 170 million $. AMBAC said that the accused has not disclosed that many borrowers had little or no ability to repay.

When Ambac filed its complaint in 2010, Ambac said, he had already made to claim the payment over 44 million $ and expect to pay tens of millions more.

A stipulation to the surrender of the action is filed in the State Court of New York Friday. The source familiar with the subject, said that the deposit means that the parties had settled.

John Ansbro, a lawyer for Credit Zurich, Switzerland, second Bank of Switzerland, declined to comment. A representative of Ambac did not immediately return a call for comments.

AMBAC filed for Chapter 11 in 2010 and had a restructuring plan approved by a judge in the bankruptcy last March. The company and other bond insurers sued the banks that packaged and sold mortgage securities after struggling with losses.

The trial is similar to those filed by the other guarantors of including MBIA Inc. and assured Guaranty Ltd. against these banks such as JPMorgan Chase and Co and Bank of America Corp. .

Credit Switzerland has recently become a target of probes of Government mortgage-backed securities. The Bank is under investigation by the U.S. Attorney's Office in New Jersey on securities backed by mortgages packaged and sold by the Bank, as last week reported Reuters.

Attorney general of New York Eric Schneiderman filed a complaint against Credit Switzerland in November, accusing the Bank of misleading investors who lost billions of dollars of mortgage-backed securities sold by the Bank.

The same month, the Bank agreed a settlement of 120 million $ with the U.S. Securities and Exchange Commission on the sale of mortgage bonds risky.

The case is Ambac Assurance Corp v DLJ Mortgage Capital, 600070 2010, the New York state supreme court, New York County.

(Additional reporting by Jessica Dye and Nick Brown; Editing by Bob Burgdorfer)

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