The U.S. District Court of New Jersey has sided with Sperry Associates Federal Credit Union in a case involving a CUMIS fidelity bond and whether fraud committed by two mortgage companies impacted coverage.
In 2006, the $307 million Sperry in Garden City Park, N.Y., entered into a mortgage loan servicing agreement with CU National Mortgage, which also agreed to assist in selling any mortgages to the secondary market, according to Sperry's complaint. The agreement did not authorize CUN or its parent company, U.S. Mortgage Corp., to endorse, assign or sell any mortgages without Sperry's consent.
Both mortgage companies, along with officials overseeing the entities, were later charged with fraud for selling the loans belonging to Sperry and other credit unions without their consent. The mortgages were then sold to Fannie Mae.
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