Fremont Notified of B&C Loan Sale Defaults

Fremont General Corp., Brea, Calif., has received notifications from two affiliated third-party purchasers of $3.15 billion of residential subprime mortgage loans alleging that Fremont is in default in connection with the loan sales. "To support the bank's obligation to repurchase any loans that were sold in the transaction, ... Fremont General provided each of the purchasers with a guaranty to honor any of the bank's obligations under such loan sale agreements," Fremont said. The company said it has failed to deliver specified financial statements and certifications as required under the covenants, but stressed that the notifications do not allege that Fremont is in breach of its obligations under the loan sale agreements. Fremont said it cannot confirm its ability to satisfy a tangible net worth covenant due to its efforts to complete its 2007 consolidated financial statements. The company said it is in discussions with the purchasers to seek a waiver of the requirement. Fremont can be found online at http://www.fremontgeneral.com.