| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers F > Headlines for First Magnus Financial Corp. > News item |
First Magnus Financial creditor asks for relief from automatic stay
By Reshmi Basu
New York, Aug. 30 - A creditor of First Magnus Financial Corp. asked for relief from an automatic stay, saying that it needs protection in order to keep its collateral base from losing value, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Arizona.
According to the motion, Countrywide Warehouse Lending provided First Magnum with a line of credit for the originating, acquiring or repurchasing of mortgage loans.
The warehouse lender, a subsidiary of Countywide Financial Corp., said it is owed at least $28.99 million from First Magnus. That debt is secured by collateral such as certain mortgage loans and promissory notes, which according to Countrywide are not being protected.
The lender said the value of the collateral is decreasing due to many factors, including the declining market value of mortgage loans and First Magnus' inability to service the loans since it has laid off almost 98% of its pre-bankruptcy workforce.
In addition, Countrywide noted that First Magnus has already said it plans to either sell or turn over the loans to Countrywide.
"Therefore, granting Countrywide relief from the stay would not frustrate the debtor's intended purposes for the collateral, since the debtor already intends to dispose of the mortgage loans," the lender said in the motion.
By allowing Countrywide to assume the servicing and sale of the loans, it will "relieve the understaffed debtor of those burdens, while ensuring that the maximum value for the mortgage loans can be realized."
A hearing date has not been scheduled.
First Magnus, a Tucson, Ariz., mortgage loan originator, filed for bankruptcy on Aug. 21. Its Chapter 11 case number is 07-10578.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.