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| Two mortgage bankers have been sued by a Wall Street investment bank that is trying to force them to honor $30 million in repurchase requests.
Morgan Stanley Mortgage Capital Holdings filed the lawsuits on Tuesday against Fieldstone Mortgage Co. and AmeriMortgage Bankers LLC to force them to repurchase or cure a total of 81 defaulted mortgages with balances totaling nearly $30 million. In nearly identical language, the lawsuits allege that each lender “has refused and continues to refuse to cure the breaches and/or repurchase the defaulted loans in breach of” its contract or agreement with Morgan Stanley. Morgan Stanley began purchasing loans from Columbia, Md.-based Fieldstone in 2003 and was “damaged” when 72 loans purchased in 2006 and 2007 had early payment defaults, with failures to either make the first monthly payments or becoming 30 or more days late on two or more of the first six monthly payments. Those 72 loans that were purchased from the troubled subprime lender have current balances ranging from $44,582 to $1.29 million for a total of $26.5 million, according to the suit, which was filed in U. S. District Court in Baltimore. Morgan Stanley entered into its contract to purchase loans from Miami-based AmeriMortgage Bankers on October 5, 2006. The nine defaulted loans cited in the suit, which was filed in U.S. District Court in Miami, were purchased from December 2006 to April 2007. Their current balances range from $48,881 to $864,000 for a total of $2.7 million. Both suits also seek judgments for damages, attorney fees and other costs. In a statement, Credit-Based Asset Servicing and Securitization LLC, or C-BASS, which acquired Fieldstone in July, blamed the failure to cure or repurchase the loans on the adverse impacts on liquidity caused by “an unprecedented amount of margin calls from our investors” as a result of “the current severe state of disruption in the credit markets.” MGIC Investment Corp. and Radian Group Inc. announced they may lose their collective $1 billion investments in C-BASS. Officials at Fieldstone, a real estate investment trust that stopped accepting new applications following the disclosure of potential insolvency at its parent, did not return calls. Officials at AmeriMortgage, which says it was founded in 1998 as a mortgage broker, could not be reached for comment. |
