August 30, 2014 12:37 AM ET

Thrifts and Mortgage Finance

Company Overview of EMC Mortgage LLC

Company Overview

EMC Mortgage LLC, a mortgage banking company, engages in servicing residential mortgage loans. Its services include securitization, servicing, and default management. EMC Mortgage LLC was formerly known as EMC Mortgage Corporation. The company was founded in 1990 and is headquartered in Lewisville, Texas with additional offices in Irvine, California. EMC Mortgage LLC operates as a subsidiary of The Bear Stearns Companies, LLC.

2780 Lake Vista Drive

Lewisville, TX 75067-3884

United States

Founded in 1990

Phone:

800-695-7695

Fax:

469-759-4704

Key Executives for EMC Mortgage LLC

Senior Vice President of Financial Operations Division
Chief Information Officer and Executive Vice President
Vice President and Assistant General Counsel
Senior Vice President and Chief Litigation Counsel
Senior Vice President
Compensation as of Fiscal Year 2014.

EMC Mortgage LLC Key Developments

Attorney General Schneiderman Sues J.P. Morgan Securities LLC, JPMorgan Chase Bank, N.A. and EMC Mortgage LLC for Fraudulent Residential Mortgage-Backed Securities Issued by Bear Stearns

In his role as co-chair of the Residential Mortgage-Backed Securities Working Group, Attorney General Eric T. Schneiderman announced a Martin Act lawsuit against J.P. Morgan Securities LLC; JPMorgan Chase Bank, N.A. and EMC Mortgage LLC for making fraudulent misrepresentations and omissions to promote the sale of residential mortgage-backed securities (RMBS) to investors. According to Attorney General Schneiderman's lawsuit, these defendants deceived investors as to the care with which they evaluated the quality of mortgage loans packaged into residential mortgage-backed securities prior to Bear Stearns & Co's collapse in early 2008, incurring losses that have totaled approximately $22.5 billion to date. Attorney General Schneiderman's lawsuit is the first legal action from the RMBS Working Group. The Attorney General's lawsuit charges that Bear Stearns failed to abide by its representations that the loans underlying their RMBS were originated in accordance with the applicable underwriting guidelines, i.e., the standards in place to ensure, among other things, that loans were extended to borrowers who demonstrated the willingness and ability to repay. Further, while the defendants claimed that they undertook "due diligence" to ensure that the loans they purchased from originators complied with the relevant guidelines, they in fact, routinely overlooked defective loans that were identified through the due diligence review and ignored deficiencies that they knew existed in the due diligence review process itself.

Eric T. Schneiderman Files Civil Suit Against The Bear Stearns Companies, LLC and EMC Mortgage LLC over Mortgage Securities Pools

The federal mortgage task force that was formed in January by the Justice Department filed its first complaint against a big bank on October 1, 2012, citing a broad pattern of misconduct in the packaging and sale of mortgage securities during the housing boom. The civil suit against The Bear Stearns Companies, LLC, now a unit of JPMorgan Chase, was brought in New York State Supreme Court by Eric T. Schneiderman, the attorney general who is also a co-chairman of the task force, known as the Residential Mortgage-Backed Securities Working Group. The complaint contends that Bear Stearns and its lending unit, EMC Mortgage LLC, defrauded investors who purchased mortgage securities packaged by the companies from 2005 through 2007. The firms made material misrepresentations about the quality of the loans in the securities, the lawsuit said, and ignored evidence of broad defects among the loans that they pooled and sold to investors. Moreover, when Bear Stearns identified problematic loans that it had agreed to purchase from a lender, it was required to make the originator buy them back. But Bear Stearns demanded cash payments from the lenders and kept the money, rather than passing it on to investors, the suit contends. The allegations in the suit against Bear and EMC are not new. The task force complaint closely echoes legal arguments made in recent years by numerous private litigants trying to recover losses in mortgage securities. Most of these cases continue to inch their way through the courts. The complaint contends that Bear Stearns defrauded investors when it assured them of the stringent reviews being made of the loans the firm was bundling. 'Rather than carefully reviewing loans for compliance with underwriting guidelines'. The suit was brought under New York’s Martin Act, the state law that gives the attorney general wide latitude to bring fraud cases without demonstrating a defendant intended to defraud. The suit does not seek specific damages but asks for restitution for investors victimized by the deceptive practices and disgorgement of money received in connection with the fraud.

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