Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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The complaint charges Radian and certain of its officers and directors with violations of the Exchange Act. Radian operates, through its subsidiaries and affiliates, as a credit enhancement company that provides credit protection products and financial services to mortgage lenders and other financial institutions. One of Radians principal affiliates is Credit-Based Asset Servicing and Securitization, known as C-BASS. C-BASS is an investor in the credit risk of subprime single-family residential mortgages.

According to the complaint, during the Class Period, defendants issued materially false and misleading statements that misrepresented and failed to disclose: (i) that the Companys $468 million investment in C-BASS was materially impaired as C-BASS was experiencing increasing margin calls and C-BASSs investments were declining in value at a significant rate; (ii) that the Company was materially overstating its financial results by failing to properly value its investment in C-BASS and by failing to write-down that investment in a timely fashion; and (iii) as a result of the foregoing, the Companys financial statements were not prepared in accordance with Generally Accepted Accounting Principles (GAAP) and, therefore, were materially false and misleading.

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Finally!   Notice the D&O allegations, and CBASS!  Told you Larry!

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For Gary

Radian Draws on Credit Line, Faces Suits
Friday August 17, 3:37 pm ET
By Deborah Yao, AP Business Writer

Mortgage Insurer Radian Draws on Credit Line, Faces Lawsuits

PHILADELPHIA (AP) -- Radian Group Inc., one of the nation's largest mortgage insurers, has drawn down half its credit line and faces shareholder lawsuits accusing the company of securities violations.

Radian, facing massive losses in subprime investments, said it's getting $200 million from a $400 million unsecured revolving credit facility expiring in 2011, according to a filing late Thursday with the Securities and Exchange Commission.

Radian said it doesn't need the funds now, but given volatile market conditions, it decided to tap the credit line for "greater financial flexibility and adequate liquidity" in the long run. The Philadelphia-based company, which insures mortgages and other debt, said it has no current plans to further use the credit line.

Shares of Radian soared by $2.06, or over 12 percent, to $19.02 amid a stock market surge.

This week, at least four securities lawsuits were filed against the company in U.S. District Court in Philadelphia.

Law firms representing shareholders are accusing Radian of making "materially false and misleading" statements about the financial health of an affiliate, Credit-Based Asset Servicing and Securitization LLC. Subsequent disclosures of problems at C-BASS, which invests in subprime home loans using borrowed money and packages them into securities, tanked Radian's stock.

Radian did not immediately return calls for comment.

The subprime mortgage market began collapsing in February when HSBC Holdings PLC and New Century Financial Corp. said the value of their loan portfolios were hit hard by mounting payment defaults. Dozens of subprime lenders have since gone bankrupt as banks have become more reluctant to put money behind risky mortgage loans.

C-BASS has been hard hit by margin calls, where a lender demands upfront loan repayment or takes collateral.

As of July 27, C-BASS has met only $263.5 million of $362.7 million in margin calls for that month, according to SEC filings. From Feb. 1 to June 30, C-BASS paid $290 million to meet lenders' margin calls.

Sam Rudman, an attorney representing shareholders in one of the lawsuits against Radian, said his firm is also looking into suing MGIC Investment Corp., the Milwaukee-based parent of the Mortgage Guaranty Insurance Corporation.

MGIC, the country's largest mortgage insurer, and Radian each own 46 percent of C-BASS, with Radian investing $468 million and MGIC putting in $466 million. Each insurer has also provided C-BASS access to a $50 million credit line, which was fully tapped.

Radian and MGIC have acknowledged that they could lose their entire investment in C-BASS.

Since the meltdown at C-BASS, MGIC wants to back out of its $5.5 billion acquisition of Radian, now valued at around half since MGIC's shares have plunged since the February announcement. Radian said MGIC doesn't have grounds to cancel the deal. On Friday, MGIC shares were up $1.40, or 4 percent, to $36.47.

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Nye Lavalle
LOL they wanted to make sure the money was in the bank! LOL
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