twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to 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

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

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

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

Press Releases
Reports and announcements from

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.

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

Mortgage News


Mortgage News

HOT Topics









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

Mortgage Firms Wade through Bankruptcies

Recent activity on mortgage-related corporate bankruptcies

Feb. 15, 2011


A settlement is being sought with former executives by a former financial giant that is in corporate bankruptcy. Investors in a hard-money lender in Maine are spooked by the cost of legal representation, while one 'big bucks' filing is being fought tooth-and-nail by the company's creditors.

Bankruptcy Trustee Joel I. Sher
has asked the court to approve a $6.5 million settlement obtained with the former officers of Thornburg Mortgage Inc. In court documents filed Feb. 13 in federal bankruptcy court in Baltimore, Md., the trustee asked the court to approve a global settlement that would put to rest the legal claims and plethora of lawsuits swirling around the former executives that stem from the 2009 Chapter 11 bankruptcy filing. The agreement calls for the surrender of personal property and release of claims against the defendants.

However, the requested settlement does not affect the lawsuits filed against the investment banks. For example, a Baltimore federal judge ruled in September 2011 that the trustee overseeing the liquidation of Thornburg Mortgage Inc. could move forward in its lawsuit against Barclays Capital Inc. The trustee has also sued some of the biggest names in mortgage finance including Goldman Sachs, Chase and Bank of America.

The trustee continues to settle claims in the case of the Financial Resources Mortgage Inc. bankruptcy. Two hearings are scheduled on March 15. The hearings will be on the trustee's motion to approve a compromise and settlement with two of the defendants.

The claims of a couple described as the leaders of the group of investors of the commercial mortgage company were settled in July after they reportedly saw the legal fees incurred by another woman in attempting to recoup her investment. The company promised high rates of return to those lending it money to fund specific projects.

The bankruptcy is one of the most complicated in Maine's history, spawning numerous lawsuits and state investigations into the agencies charged with regulating Financial Resources and the handing down of prison sentences for its principals.

In the fifth-largest bankruptcy for a financial company, MF Global, the court ruled on Dec. 27 that the trustee does not have a conflict stemming from prior work done for one of MF Global's lenders. MF Global filed for bankruptcy after it was forced to reveal that it had made a $6.3 billion bet on European sovereign debt, spooking investors and customers.

The deadline for objecting to administrative claims is March 8 in the Taylor, Bean & Whitaker Chapter 11 bankruptcy. Taylor Bean & Whitaker Mortgage Corp.'s liquidation plan was confirmed in July. The plan calls for the estate's remaining assets to be placed into a trust for distribution to creditors. A hearing on the 93-page reconciliation report is scheduled for March 9 even though the court has already approved the liquidation plan.

The Florida businessman, Lee Farkas, who built Taylor Bean from a small mortgage company into the largest mortgage lender in the United States, was sentenced to 30 years in federal prison.

A third confirmation hearing is reportedly scheduled for Feb. 16 in the Washington Mutual Inc. bankruptcy. According to a story in American Banker, the company warned that delays in its attempts to exit from bankruptcy are costing $30 million a month, money that will affect creditors at the bottom of the repayment plan. In a bankruptcy filing, there is a hierarchy of creditors where certain types of creditors receive a priority in payments in full over others; thus, the more money in the bankruptcy pot, the more there is for creditors at the bottom of the payment priority pyramid.

Washington Mutual and WMI Investment filed a motion on Feb. 14 asking the court to oppose a request for an order for direct appeal to the Third Circuit of the Feb. 16 confirmation hearings. Evidently, anticipating unhappiness with the result of the yet-to-be-held confirmation hearing, a consortium of holders of trust preferred securities have already asked the court for permission to appeal to another court, while Washington Mutual and WMI have asked the court to deny that request.

The Seattle Times reported Wednesday only 62 percent of WaMu's shareholders will approve a plan to bring the company out of bankruptcy, though 66 percent is needed. The plan would reportedly allot around $7 billion in disputed assets to more senior creditors and give preferred and common shareholders ownership of a much smaller company centered on a mortgage reinsurer.

Citing people familiar with the matter, Bloomberg reported that Residential Capital LLC is talking to buyout firms including Fortress Investment Group LLC and Cerberus Capital Management LP about selling itself through a pre-packaged bankruptcy. Parent Ally Financial Inc. wants to establish a plan for ResCap by March 31, prior to upcoming financing and liquidity deadlines.

Case Info:

In Re: TMST, Inc. f/k/a Thornburg Mortgage Inc. et al.
Case Nos. 09-17787, 17790-17792-DWK (Jointly Administered under Case No. 09-17787), Chapter 11, filed: August 24, 2009 (U.S. Bankruptcy Court for The District Of Maryland, Baltimore Division).

In Re: Financial Resources Mortgage, Inc. and CL&M, Inc. and other jointly administered cases.
Case Nos. 09-14565-JMD, 09-14566-JMD, Chapter 7 (U.S. States Bankruptcy Court for the District of New Hampshire).

In Re: MF Global Holdings Ltd., et al.
Case No. 11-15059 (MG), Chapter 11 (Bankruptcy Court for the Southern District of New York).

In Re: Taylor Bean & Whitaker Mortgage Corp. REO Specialists, LLC and Home America Mortgage, Inc.
Case No.: 3:09-bk-7047-JAF (U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville),

In Re Washington Mutual Inc., et al.
Case No. 08-12229-MFW, filed: Sept. 26, 2008 (U.S. Bankruptcy Court for the District of Delaware).

next story

back to current headlines

Lisa D. Burden has been covering mortgage litigation and mortgage legislation for since 2004 from the Washington, D.C., area. She holds a law degree from the University of Maryland. Lisa is the publisher of Maryland Employment Law Reporter and a freelance journalist who previously wrote for Institutional Investor publications and the Baltimore Daily Record.

e-mail Lisa at: [email protected]

Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.

The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.

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.

Logout forgot

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