Nationwide Advantage Mortgage Co. v. GSF Mortgage Corp.

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NAMC, which buys, services, and sells residential mortgages, and GSF, a residential mortgage lender that also sells mortgages, entered into an Agreement whereby GSF would sell loans to NAMC. To use the Fannie Mae Desktop Originator System (DO), which evaluates potential mortgagors under Fannie Mae’s eligibility standards, GSF needed a sponsoring lender. GSF had several sponsors from 2006 until 2011; one was NAMC. Every time GSF downloaded a report it paid Fannie Mae a $15 fee and the sponsoring lender had to pay Fannie Mae between $20 and $28. GSF was not aware that the sponsoring lender also had to pay a fee. In 2008 NAMC terminated its Agreement with GSF, but failed to notify GSF to stop using it as a sponsoring lender. NAMC was billed by Fannie Mae for almost $278,000 for GSF’s use of the system, 2008-2011. The district judge granted summary judgment in favor of GSF in a suit charging breach of contract, breach of fiduciary duty, fraud, and unjust enrichment. The Seventh Circuit affirmed. “NAMC is a sophisticated enterprise... its failure to cancel its sponsorship of GSF when it severed all its other relations to that company was an inexplicable blunder for which it has only itself to blame.” View "Nationwide Advantage Mortgage Co. v. GSF Mortgage Corp." on Justia Law