Lehman's Fairway lawsuit concerns one cash-out refinance loan
A lawsuit brought by Lehman Brothers Holdings against Fairway Independent Mortgage Corp. concerns only one loan originated in April 2006, Fairway's CEO said Tuesday, in response to the lawsuit. "We originate between 16,000 and 17,000 loans a year. This is about one loan," Fairway CEO Steve Jacobson told HousingWire Tuesday. "I think that's very important to understand." Lehman Brothers is suing Fairway for misrepresentation of the borrower's debt with regard to that loan. Lehman also alleges that Fairway violated the repurchase agreement between the two firms. The loan was a cash-out refinance, stated-income loan worth $291,000 with an 80% loan-to-value ratio, according to Fairway. The borrower was located in Florida at the time the loan was originated and, according to Jacobson, the loan product at the center of debate doesn't exist anymore. Jacobson said Fairway's quality control division is rebutting the Lehman accusation filed on Nov. 19 by "collecting the facts" and preparing a response to the holding company about the repurchase. Write to Christine Ricciardi.