home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map

twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Mortgage Lawsuits News | Mortgage Litigation Index
Mortgage industry lawsuit news and mortgage litigation coverage. Stories about legal settlements, judgments and mortgage class actions.

Secondary Subprime Suit

EMC vs. MortgageIT

December 15, 2006

WASHINGTON correspondent for MortgageDaily.com

Two mortgage companies, one owned by an investment banker and another in the process of being acquired by an investment banker, are battling over $70 million in subprime mortgage buybacks.

In a legal action being fought in federal court in Dallas, EMC Mortgage Corp. has pointed the finger at MortgageIT Inc. EMC says MortgageIT owes it $70 million in buybacks for about 587 subprime loans.

But MortgageIT has denied the allegations.

Irving, Tx.-based EMC says MortgageIT failed to live up to a 2003 agreement to repurchase residential first or second lien subprime mortgage loans that went into default or that were paid off early. EMC says in legal documents that it filed the lawsuit only after MortgageIT failed to meet its out-of-court demands for satisfaction of the matter.

New York-based MortgageIT has refuted EMC's claims in court documents. MortgageIT's attorney declined to comment, explaining that it is MortgageIT's policy not to comment on matters in litigation.

In a 124-page complaint, Bear Stearns Co. subsidiary EMC is suing for breach of contract, breach of warranty and has asked the court to compel MortgageIT to specifically perform in accord with the written agreement between the two lenders. EMC is still fine-tuning the number of loans it claims are in dispute as attorneys for the company are expected to file a supplement to its complaint in court this month.

Specifically, EMC alleges that MortgageIT violated the express terms of the agreement they made in 2003 because it did not buyback certain that were "clearly" in default because the borrower failed to make a scheduled payment. EMC claimed MortgageIT agreed to repurchase any loan within five business days of notification in the event any of the first three scheduled monthly payments were not made in the month due.

EMC alleged MortgageIT failed to make payments to EMC in cases where the borrower made a principal prepayment and that MortgageIT failed to indemnify EMC for MortgageIT's alleged failure to comply with some of the servicing provisions of the agreement. EMC claimed MortgageIT agreed to pay EMC if a mortgagor made a principal prepayment within three months of the closing date of the loan. EMC said in court documents that MortgageIT received principal prepayments but did not send the money on to EMC.

EMC is also asking for reimbursement of its attorneys' fees.

In addition to monetary damages, EMC said in court documents that it has been harmed by MortgageIT's alleged breach of the agreement because it is has to maintain the loans and, as a result, remains exposed to any claims against or losses that might be suffered by the owner of the loans.

EMC also said that because the loans are in default, it is unable to include them in securitizations or other similar packages, one of the specific purposes for which it purchased the loans.

The Texas-based lender said in the lawsuit that it notified MortgageIT several times of the alleged breaches and that it provided MortgageIT with several opportunities to resolve the alleged defaults, to reimburse it under the agreement or to buyback the loans.

The case was filed Feb. 16, 2006 in the United States District Court Northern District of Texas, Dallas Division.

EMC was reportedly among 11 lenders that unsuccessfully sought more than $20 million in loan repurchases from a Bellville, N.J., lender, D&M Financial Corp. which declared bankruptcy.

MortgageIT has announced it expects to be acquired by Deutsche Bank next month.

Lisa D. Burden is a legal analyst for MortgageDaily.com and holds a law degree from the University of Maryland. She is currently a freelance journalist who previously wrote for Institutional Investor publications and the Baltimore Daily Record.

e-mail Lisa at: [email protected]

Nonprime and Subprime News | Subprime Statistics
Stories about non-QM products. Coverage of subprime, Alt-A and
hard money lending. Home-equity loans and home-equity lines of credit.

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders