Bank of New York Mellon Sues WMC Mortgage Over Loans
Bank of New York Mellon Corp., acting as a trustee for a pool of home loans, sued a former General Electric Co. unit seeking the repurchase of as much as $680 million in residential mortgages.
Bank of New York Mellon filed the suit as trustee of GE-WMC Mortgage Securities Trust 2006-1, which was formed as part of a $680 million mortgage securitization sponsored by WMC and affiliates, according to documents filed today in New York State Supreme Court in Manhattan. The suit, which also names GE Mortgage Holding LLC as a defendant, seeks more than $260.2 million in damages.
WMC, which was sold by Fairfield, Connecticut-based General Electric (GE) in 2007, sold all of its right, title and interest to the pool of loans to GE Mortgage, which then sold its right, title and interest to a depositor that transferred and assigned them to the trustee.
A holder of more than 25 percent of the voting rights to the pool in May identified more than 2,600 loans that breached representations and warranties made by WMC concerning their “nature, characteristics, history and quality,” according to the court documents filed today.
Repurchase Letter
The trustee later that month asked that WMC and GE Mortgage cure the breaches or repurchase the loans, and the two companies refused to do so until further information was provided, according to the court documents.
“Defendants have not repurchased or cured a single loan in response to the repurchase demand letter,” the trustee said in today’s filing. “Moreover, WMC’s response letter indicates that WMC and GE Mortgage do not intend to comply with their repurchase obligations.”
Russell Wilkerson, a spokesman for General Electric Capital Corp., declined to comment on the lawsuit in an e-mail.
The case is Bank of New York Mellon v. WMC Mortgage LLC, 652928/2012, New York State Supreme Court (Manhattan).
To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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