MORRISTOWN, N.J. (3/11/09)--Picatinny FCU has sued mortgage giant Fannie Mae, seeking the return of more than $14 million in mortgages that the credit union says were sold without authorization by its former mortgage loan servicer to Fannie.
The lawsuit was filed Monday in a state court in Morristown, N.J. , by the Dover, N.J.-based credit union (DailyRecord.com March 10).
The action was just a week and a half after Picatinny filed a response to a Chapter 11 bankruptcy filed by its former mortgage loan servicer, U.S. Mortgage Corp., doing business as CU National Mortgage. The bankruptcy was filed in the U.S. Bankruptcy Court in Newark, N.J. (News Now March 2).
Picatinny's lawsuit said U.S. Mortgage Corp., based in Pine Brook, N.J., sold 58 mortgages without the credit union's consent to Fannie. On Feb. 24, the credit union asked Fannie Mae to return the mortgages, but the government-run agency declined, its attorney told the Record.
The lawsuit states that Michael J. McGrath, president/CEO of U.S. Mortgage, pretended to be the credit union's assistant vice president when he brokered the sales to Fannie Mae. The suit said McGrath was not an assistant vice president and was not authorized to perform such transactions on behalf of the credit union.
According to lawyers in the case, the credit union is negotiating with U.S. Mortgage in bankruptcy court and reached an agreement Monday that bars the company from having control over any of the credit union's mortgages. The agreement, however, must be approved by a judge, said the article.
courtesy of cuna.org