Wachovia Bank N.A. has filed a lawsuit against Ameriquest Mortgage Co. alleging the former subprime lender has not complied with repurchase requests on loans with fraudulent files.
Wachovia sued the Orange, Calif.-based company for failure to repurchase 135 nonperforming mortgages that Ameriquest sold to Wachovia on Dec. 29, 2005.
The nonperforming loans included “incorrect credit scores, false employment status and misstatements of the kind of home being financed,” Wachovia alleges in its complaint.
“The loans had not been underwritten pursuant to the underwriting procedures that Ameriquest had agreed to apply,” it states, and thus Ameriquest’s representations and warranties regarding the loans “are false and were breached by Ameriquest.”
Under the terms of their loan purchase agreement, “Ameriquest had a duty to use ‘its best efforts to cure such breach in all material respects’,” but failed to do so, the suit further alleges. Ameriquest was notified of the breaches and asked to either repurchase the loans or cure the breaches in a series of letters from Nov.29, 2006 to May 30, 2007.
The loans, for which Charlotte, N.C.-based Wachovia paid nearly $129 million, had been “originated by Ameriquest and its affiliates,” according to the complaint.
The parent of Ameriquest, ACC Capital Holdings, announced in August it had sold its wholesale subsidiary, Argent Mortgage Co., to Citigroup and wind down Ameriquest.
Ameriquest did not respond to a request for comment on Wachovia’s lawsuit.
“Wachovia filed the lawsuit against Ameriquest,” Wachovia spokeswoman Christy Phillips-Brown told MortgageDaily.com, “to seek resolution on breach of contract. A number of loans sold to Wachovia by Ameriquest violated the terms of the loan purchase contract and we believe that Ameriquest is obligated to repurchase those loans.”
Ameriquest has not only refused to repurchase any of the 135 loans but has “ceased communicating with Wachovia regarding the mortgage loans,” according to the complaint filed by Wachovia in Mecklenburg County Superior Court in Charlotte on Sept. 17.
The suit asks the court to either enter a judgment ordering Ameriquest to “perform its repurchase obligations” or to enter a judgment that Ameriquest pay damages to Wachovia for breach of the purchase agreement.
On Wednesday, Ameriquest filed a notice of removal from Superior Court to U.S. District Court “on the grounds that this is an action in which the District Courts for the United States have original jurisdiction.”
