LOS ANGELES (CN) – Countrywide Home Loans and Bank of America filed a $45 million complaint against a Pennsylvania-based mortgage lender, claiming the company breached a series of agreements to sell loans to Countrywide and buy back bad loans.
According to the Superior Court complaint, Gateway Funding Diversified Mortgage Services LP and Gateway Funding Inc. agreed in 1995 to sell loans to Countrywide. The agreement said Gateway was obligated to repurchase loans if there was evidence of fraud in the sale of the loan, if a mortgage insurer denied coverage, or if the first payment due was not submitted, according to the complaint.
Gateway, however, allegedly failed to repurchase numerous loans as required by their agreement with Countrywide. A 2007 settlement agreement provided that if Gateway did not make a cash payment and provide $750 million in loans to Countrywide, the repurchase obligations would be reinstated and there would be a non-delivery fee, the suit states.
Gateway allegedly did not provide the minimum volume of loans and failed to pay other fees as promised.
The plaintiffs are represented by David B. Epstein and Robyn L. Ikehara with Epstein, Turner & Song.