Mortgage Co. Seeks Defense in Lehman Contract Suit

Law360, New York (July 29, 2011, 9:37 PM EDT) -- American Federal Mortgage Corp. on Friday sued certain underwriters at Lloyd's of London in New Jersey, saying the insurer is obligated to defend and indemnify AFMC in a breach of contract suit brought by bankrupt investment banking giant Lehman Brothers Holdings Inc.

Flanders, N.J.-based AFMC went after Lloyd's in a third-party complaint filed within Lehman's suit, which claims that it breached terms of a loan agreement that guaranteed the mortgage loans did not originate from any misrepresentations, fraud or predatory lending practices.

Lehman claims that the...
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