Court Rejects $15M Loan To First Magnus

Law360, New York (September 10, 2007, 12:00 AM EDT) -- Bankrupt mortgage lender First Magnus Financial Corp. will not be able to borrow $15 million from a Wells Fargo unit, now that a judge has shot down the loan for being an overly expensive credit.

Judge James M. Marlar of the U.S. Bankruptcy Court for the District of Arizona ruled Friday that while he appreciated the effort behind the proposal, it appeared to “overreach in favor of the lenders.”

He pointed out that the loan carried an interest rate of 18.25%, a 7% fee, a $450,000...
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