First Magnus, Star Equity Bury Loan Fraud Claims

Law360, New York (May 15, 2009, 12:00 AM EDT) -- Now-defunct First Magnus Financial Corp. has buried the hatchet with Star Equity Funding LLC and several of its brokers over claims that Star Equity fraudulently inflated the value of residential properties and misappropriated borrower information, resulting in undercollateralized loans that caused "significant damages" to FMFC when it was forced to repurchase the loans after the properties foreclosed.

Judge Eric F. Melgren of the U.S. District Court for the District of Kansas signed off on the parties' stipulation to settle the lawsuit on Thursday, ending bankrupt FMFC's...
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