EMC Mortgage Corporation filed a civil lawsuit in the United States District Court for the Eastern District of New York against the following defendants:
D&M Financial Corp.;
Dimitri Michelaki (alleged to be an officer, employee and director of D&M and the representative of D&M who executed the contract between the parties);
Regency Capital Funding (alleged to be the mortgage broker on the majority of the loans);
Lou Sandella (alleged to be branch manager of both D&M and Regency and acted as loan officer);
Andy Perdikos (complaint alleges that, upon information and belief, Perdikos is not a licensed appraiser in New York although he represents himself as such.)
The lawsuit arises out of EMC’s purchase of 42 loans originated by D&M. According to the Complaint, following its purchase of the loans, EMC discovered the following misrepresentations in the loans:
(i) vastly inflated appraisals, oftentimes done by an unlicensed appraiser; (ii) fake checks presented at closing to hide that the purchase price on the mortgaged properties was being misrepresented; (iii) inaccurate information about the borrower?s income and assets; (iv) material misstatements about the number of units at the mortgaged properties intended to hide that the properties in question were note, in fact, eligible for purchase by EMC, pursuant to the terms of the parties? purchase agreement; and (v) misrepresentations about the intent of respective purchasers to reside at the mortgaged premises . . .
The Complaint alleges that D&M refused to repurchase the loans and seeks damages of no less than $3,000,000 based on causes of action for Breach of Contract and Warranty (as to D&M only), Fraud, Negligent Misrepresentation and Negligence.