marshmallow ... sounds soft ... perhaps from a liberal chat room?
AIG intent listed in detail ... read at http://www.docstoc.com/docs/88884809/AIG-versus-BAC-8-8-2011
See CitiGroup breaking news at http://www.zerohedge.com/news/bank-america-just-start-paulsons-problems-behold-citigroup
One of the key charges in the AIG lawsuit is that almost 20% of the mortgages in question were "underwater" at the time of origination. IOW, the bank loans exceeded the values of the mortgaged properties.
Hiding this information from an insurer is fraud, pure and simple.
Writing CDS's on underwater mortgages is not a practice which most insurers would countenance.