Skip to main content

PRMI Ordered To Pay $20M For Defaults

Head of Multimedia
Feb 10, 2023

Lawsuit stems from 2008 financial crisis.

Primary Residential Mortgage Inc. has a legal bill of more than $20 million after losing its fight over defaulted mortgages.

The lawsuit stems from mortgages PRMI sold to Residential Funding Co. (RFC) ahead of the 2008 financial crash.

RFC then securitized the loans, but when they defaulted, the trusts that bought the securities sued.

RFC went bankrupt, filing a Chapter 11 petition to reorganize its finances in 2012, and as part of the reorganization plan, RESCAP liquidating trust was created to go after lenders like PRMI for damages.

In 2020, a judge sided with RESCAP and ruled that PRMI was responsible for $5.4 million for defaulted loans, and another $16.6 million in various legal costs. An appellate judge in Minnesota has now upheld that decision.

PRMI says it did not breach the terms of the sale, but the judge ruled that the contract clearly gave RFC sole power to make that determination. That power then transferred to RESCAP.

PRMI also raised several claims that the court would  “[i]nvite unfairness, speculation, and false precision" by accepting RESCAP’s calculation of damages.

The appellate judge disagreed, saying RESCAP followed both Minnesota law and past court rulings in coming up with the number.

About the author
Head of Multimedia
Mike Savino was Head of Multimedia at NMP.
Published
Feb 10, 2023
More from
Courts
LoanSnap Officially Loses Connecticut License

The AI mortgage startup formerly faced a cease and desist and a consent order from the State of Connecticut.

Oct 09, 2024
Judge Grants Grella's Motion To Dismiss NEXA Lawsuit

NEXA CEO Mike Kortas confirmed that the company is prepared to file an amended complaint

Sep 27, 2024
Florida Judge Dismisses UWM Ultimatum Case

The wholesale lender still faces charges of racketeering, civil conspiracy, and RESPA violations stemming from a separate ultimatum-inspired class action lawsuit, filed in April.

Sep 24, 2024
NEXA's Drawn-Out Legal Battle With Smart Mortgage Centers Gets Dismissed

Lawsuit over alleged "stolen" client information gets dismissed due to a lack of evidence

Sep 20, 2024
Fathom Realty Settles In NAR Class-Action Lawsuit

Subsidiary of Fathom Holdings settles for $2.95M

Sep 17, 2024
Ally Bank Faces Class Action Lawsuit Over Data Breach

The class members claim Ally Financial was negligent in safeguarding consumers' personal information

Sep 10, 2024