Lehman Sues Nationsfirst Lending Over Repurchase of Faulty Mortgage Loans
Lehman Brothers Holdings Inc., the investment bank in bankruptcy since 2008, sued Nationsfirst Lending Inc. alleging it failed to honor contracts to repurchase faulty mortgage loans.
Some of the loans misrepresented borrowers’ identities and occupancy intentions, and involved kickbacks to an unlicensed loan officer in a purported “sale by owner” contract, Lehman said in a complaint filed Nov. 12 in federal court in Santa Ana, California.
Nationsfirst “has refused, and continues to refuse, to repurchase the mortgage loans” and “to indemnify Lehman” for unspecified losses, Lehman lawyers said in the complaint.
Lehman, based in New York, claims in court papers that Irvine, California-based Nationsfirst breached warranties in the mortgage transactions, and “is required to compensate Lehman immediately for all actual and consequential damages.”
Nationsfirst officials didn’t immediately answer telephone calls at the Irvine office. Nationsfirst is listed as a suspended corporation on the website of the California secretary of state.
The case is Lehman Brothers Holdings Inc. v. Nationsfirst Lending Inc., 10CV1753, U.S. District Court, Central District of California (Santa Ana).
To contact the reporters on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net; Dawn McCarty in Wilmington at dmmcarty@bloomberg.net.
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.
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