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CU System
Mortgage company ordered to turn funds over to CU
NEWARK, N.J. (3/24/09)--The U.S. Bankruptcy Court approved a consent order Friday requiring CU National Mortgage LLC to turn over all funds belonging to Picatinny FCU that the mortgage servicer allegedly withheld and to transfer mortgages it had been servicing to Picatinny's new servicer. CU National Mortgage and its parent U.S. Mortgage, based in Pine Brook, N.J., had filed for a Chapter 11 bankruptcy in U.S. Bankruptcy Court in Newark, N.J., listing more than $200 million in debts to Fannie Mae and 19 credit unions (News Now March 2). Picatinny FCU, a $247.5 million credit union based in Dover, N.J., alleged in a petition to the court that CU National Mortgage sold 58 of the credit union's mortgage loans-- totaling more than $14 million--to Fannie Mae without the credit union's knowledge or authorization. Credit unions have claimed more than $160 million of their mortgages went to Fannie Mae without authorization and that CU National Mortgage pocketed the money. The mortgage service also must turn over all loan files, reports, documents and other information, including electronic data, on the loans and any escrow being held on the properties.


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