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Nationstar in Settlement Talks in Suit Over Loan Auctions

MAR 25, 2013 1:17pm ET
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Nationstar Mortgage Holdings Inc. is in settlement talks with an investor group that sued the mortgage servicer over auctions of home loans backing securities.

Nationstar was accused in a lawsuit this month of auctioning loans at the expense of mortgage-bond investors. In a letter dated March 22 and filed in New York state court, a lawyer for the plaintiff asked for an adjournment of a scheduled hearing, citing talks to resolve the dispute.

“The parties are engaged in settlement discussions and hope that the additional time will lead to their successful resolution,” the lawyer, Jonathan Pickhardt, said in the letter to Justice Eileen Bransten of New York State Supreme Court in Manhattan.

Nationstar, which is majority-owned by Fortress Investment Group LLC, was sued by KIRP LLC on March 7. KIRP said the loan liquidations are a “blatant abdication” of Nationstar’s duties as servicer.

KIRP comprises a group of investment funds that holds in aggregate $3.5 billion in original face amount of securities from securitization trusts at issue in the case, according to a court hearing transcript.

The case is KIRP LLC v. Nationstar Mortgage LLC, 650794- 2013, New York State Supreme Court (Manhattan).

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