GE Employees FCU Claims Fraud in Sale of Mortgage Loans

MILFORD, CT. – GE Employees FCU has filed suit against a San Francisco mortgage broker claiming that she improperly used $400,000 from three mortgages she was supposed to sell, instead of selling them on the secondary market as promised and remitting the proceeds. The credit union said says it contracted with Lorraine Legg and two companies she runs to sell some mortgage loans it held in the secondary market but that Legg stole the mortgages and used the funds to benefit herself and two of her companies. The credit union is asking for $7 million in damages.