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Non-Tech : Home Solutions of America (HSOA), The best is yet to come
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From: Labrador8/30/2011 8:27:28 AM
1 Recommendation   of 20808
 
American Banker



August 30, 2011 Tuesday



HEADLINE: Fannie Mae and Credit Unions Settle



BYLINE: Ed Roberts



BODY:



Fannie Mae has agreed to settle multimillion-dollar claims brought by several

of the biggest victims of the massive CU National Mortgage scandal, more than

two years after the fraud brought down the largest independent mortgage

wholesale provider to credit unions.



Fannie agreed to settle claims brought by Suffolk Federal Credit Union in New

York, Picatinny Federal Credit Union in New Jersey and Treasury Employees

Federal Credit Union in Washington, which claimed more than $62 million of their

mortgages were improperly sold to Fannie as part of a $140 million fraud

perpetrated by Michael McGrath, president of U.S. Mortgage Corp. and its wholly

owned CU National Mortgage subsidiary.



McGrath is serving a 14-year prison term after pleading guilty to the fraud.



Lawyers for the credit unions declined to comment, but sources with knowledge

of the settlements say the combination of the Fannie payments and insurance

money will reimburse the victim credit unions for more than 90% of their

original claims.



The settlements leave two remaining credit unions out of an original 28 fraud

victims with outstanding claims against Fannie:Proponent Federal Credit Union in

New Jersey, which is still grappling in court with Fannie over a $21.6 million

claim, and Sperry Associates Federal Credit Union in New York, which had a $9.2

million claim. Lawsuits filed by the two credit unions are proceeding in federal

court.

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