Lehman sues Nationsfirst Lending over repurchase of faulty mortgage loans

Lehman Brothers Holdings Inc., the investment bank in bankruptcy since 2008, sued Nationsfirst Lending Inc. alleging it failed to honor contracts to repurchase faulty mortgage loans. Some of the loans misrepresented borrowers’ identities and occupancy intentions, and involved kickbacks to an unlicensed loan officer in a purported “sale by owner” contract, Lehman said in a complaint filed Nov. 12 in federal court in Santa Ana, California. Nationsfirst “has refused, and continues to refuse, to repurchase the mortgage loans” and “to indemnify Lehman” for unspecified losses, Lehman lawyers said in the complaint.

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