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Lehman seeks court approval of loan repurchase claim settlement
By Caroline Salls
Pittsburgh, July 27 - Lehman Brothers Holdings Inc. requested court approval of a settlement of a $62.98 million repurchase and indemnification claim filed by master servicer Aurora Loan Services LLC in Mortgage Lenders Network USA Inc.'s bankruptcy case, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.
Lehman said it pursues claims against mortgage originators or loan sellers when residential mortgage loans it purchased have gone into default or have caused the company to incur losses.
According to the motion, an estimated $60.68 million of the original Aurora claim is based on loans owned by Lehman, while the rest is based on loans held by Aurora and other securitization trusts.
However, based on a further review of its losses related to the loans that were acquired from Mortgage Lenders Network and taking into account repayments and/or sales of some of the loans, Lehman said it found that its losses were less than initially claimed.
Under the settlement, the Aurora claim will be reduced to $28 million and allowed as a general unsecured claim against Mortgage Lenders Network.
Of that settlement amount, Lehman said it estimates that $26.98 million is based on loans it owns.
The settlement is also subject to approval by the U.S. Bankruptcy Court for the District of Delaware in Mortgage Lenders Network's case.
Lehman's hearing in the U.S. Bankruptcy Court for the Southern District of New York is scheduled for Aug. 18.
New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008. Its Chapter 11 case number is 08-13555.
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