Morgan Stanley sues Fremont
From Times Wire Services
Morgan Stanley, the second-biggest U.S. securities firm, sued mortgage lender Fremont General Corp. for $10 million over its refusal to repurchase hundreds of bad home loans it sold.
Loans purchased by Morgan Stanley Mortgage Capital Holdings from Fremont Investment & Loan in 2005 and 2006 misstated the borrowers’ income, employment and assets, according to a complaint filed in federal court in New York.
Fremont was forced to exit the sub-prime mortgage business after losing $1.1 billion over six quarters, wiping out profit booked during the previous five years, the company said Thursday. The Santa Monica-based firm’s shares have fallen 80.7% this year.
