Sun West Wins Hastings Loan Repurchase Dispute
Table of Contents
Case Background
Plaintiff Sun West originated and serviced reverse mortgages. First Mariner transferred servicing rights in March 2011. Plaintiff sued First Mariner in 2015. The parties executed a Settlement Agreement on May 16, 2017. Howard Bank later merged with FNB. Defendant FNB became First Mariner’s successor. The Settlement bound successors. It required repurchase or indemnity for specified loans after purchaser demands. It also provided fee-shifting for enforcement actions.
Cause
Fannie Mae flagged two loans for defects. First, the Hastings Loan carried an incorrect legal description and utility access issues. Fannie Mae set a January 3, 2022 deadline. Plaintiff noticed Defendant under the Settlement on January 12, 2022. Howard Bank, then Defendant’s predecessor, agreed to repurchase. Extensions followed. However, no repurchase occurred. Plaintiff repurchased the Hastings Loan on March 16, 2022. Second, Fannie Mae demanded repurchase of the Barner Loan on December 16, 2021. Title defects and lien position issues prevented foreclosure. Plaintiff noticed Defendant and obtained an extension. Plaintiff short-sold the collateral. Yet obligations to Fannie Mae remained.
Injury
Plaintiff faced immediate cash outlay on the Hastings repurchase. Plaintif
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