The mortgage banking litigation carousel is taking another spin: Bank of New York Mellon Corp. has filed a lawsuit to force a former WMC Mortgage unit of General Electric Co. to buy back $680 million in residential mortgages.
According to a Bloomberg News report, Bank of New York Mellon filed the suit in its capacity as the trustee of GE-WMC Mortgage Securities Trust 2006-1, which was created as part of a $680 million mortgage securitization sponsored by WMC. The lawsuit, which names GE Mortgage Holding LLC as a co-defendant, is seeking more than $260.2 million in damages. General Electric shut down WMC in 2007 during the subprime mortgage market meltdown.
‘The defendants have not repurchased or cured a single loan in response to the repurchase demand letter,’ said Bank of New York Mellon in its lawsuit, which alleges that more than 2,600 loans within the securitization included breached representations and warranties. ‘Moreover, WMC's response letter indicates that WMC and GE Mortgage do not intend to comply with their repurchase obligations.’