Trust Sues DLJ Mortgage For $497M Over Defective Loans

Law360, New York (November 6, 2012, 1:31 PM EST) -- A trust that purchased nearly $1 billion in collateralized mortgage loans from DLJ Mortgage Capital Inc. sued the company for breach of contract in New York state court last week, claiming it misrepresented the health of the loans, which have lost have their value, and refused to repurchase them.

The pool has had a high rate of delinquency and default, losing about 50 percent of its original value, despite DLJ's representations that all of the loans met the originator's underwriting standards for credit quality, loan to...
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