Mortgage Industry Insider – Mortgage Litigation from MortgageDaily.com
DALLAS, December 18 /PRNewswire/ A federal appeals court has held an investment banker liable for “aiding and abetting” a multi-million dollar predatory lending scheme, according to coverage from MortgageDaily.com, the dominant source of online news for the mortgage industry.
In a 60-page ruling, the 9th Circuit Court of Appeals in San Francisco found that Lehman Bros. played a role in predatory lending fraud by defunct subprime lender First Alliance Corp.
“First Alliance became subject to increasing scrutiny including allegations that the borrowers’ loans were fraudulently induced,” the court of appeals said in its opinion. “There was sufficient evidence of such knowledge and assistance to support the jury’s verdict against Lehman.” (https://www.mortgagedaily.com/AppealLehman121206.asp)
In another lawsuit, EMC Mortgage Corp. says MortgageIT owes it $70 million in buybacks for about 587 subprime loans. While MortgageIT has refuted the claims, EMC claims MortgageIT failed to live up to a 2003 repurchase agreement. (https://www.mortgagedaily.com/EmcVsMortgageIt121506.asp)
Washington Mutual has reportedly agreed to settle with a couple who claimed to suffer emotional distress when their home was foreclosed on after they had filed for bankruptcy. The U.S. Bankruptcy Court for the Northern District eventually awarded the wife hundreds of thousands of dollars.
But there was a question of whether the borrowers were on the title because of numerous defaults, bankruptcy filings and changes to the title of the property.
The borrowers’ attorney told MortgageDaily.com he and WaMu’s attorney have an agreement on terms. (https://www.mortgagedaily.com/LawsuitWamu121406.asp)
Fannie Mae has filed a lawsuit against KPMG alleging the auditor is to blame for mistakes that led it to restate $6.3 billion of earnings. Fannie is seeking more than $2 billion in damages.
Fannie said in the lawsuit it had paid ten of millions of dollars over more than 30 years for KPMG to perform a “critical watchdog function.”
A KPMG spokesman told MortgageDaily.com, “The issues involved in the lawsuit … are already pending in federal court in Washington,” adding, “Accordingly we removed the suit to that same federal court where we intended to pursue our own claims.” (https://www.mortgagedaily.com/LawsuitKpmg121306.asp)
Read complete subprime mortgage news at https://www.mortgagedaily.com/Legal.asp
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