Credit Suisse sues three subprime lenders
NEW YORK (Reuters) - A Credit Suisse Group (CSGN.VX) unit is charging three subprime mortgage lenders with violating loan obligations and has filed lawsuits totaling over $30 million.
DLJ Mortgage Capital Inc., a Credit Suisse unit that purchases mortgage loans from lenders, alleges in separate suits that Sunset Direct Lending LLC and Infinity Home Mortgage Co. Inc. breached agreements to repurchase loans they originated.
DLJ is seeking nearly $24 million in buybacks from Sunset and $3 million from Infinity.
The suits allege that the lenders violated agreements to repurchase loans in the event of payment defaults. The suits cite clauses that require repurchases if borrowers are delinquent for 30 days within the first three months of the loan sale.
DLJ also filed suit against Netbank Inc. NTBK.O, alleging failure to provide both funds and information relating to purchased loans. The suit seeks $4 million in damages.
The three suits, filed in the U.S. Southern District Court in New York, likely represent a new chapter in the subprime mortgage crisis, where underperforming loans have threatened both lenders and the Wall Street firms that purchased them.
The Financial Times reported on Friday that a unit of Bear Stearns Cos. BSC.N has filed a $70 million suit against a lender. A spokesman for Bear Stearns declined to immediately comment.
(Additional reporting by Martha Graybow)
