A Credit Suisse Group unit is suing the subprime mortgage lender Sunset Direct Lending LLC, saying it failed to buy back $24 million of bad loans.
DLJ Mortgage Capital Inc. filed the breach-of-contract suit Feb. 27 in U.S. District Court in New York. The closely held Sunset Direct, of Lake Oswego, Ore., failed to repurchase loans that were 30 days or more delinquent within three months after they closed, the New York company's complaint says.
Defaults on U.S. subprime mortgages rose to a four-year high in the fourth quarter. At least 30 subprime lenders have halted operations, gone bankrupt, or sought buyers since the beginning of 2006.
Frank Frazzitta, Sunset Direct's chief financial officer, did not immediately return a call for comment. Credit Suisse spokesman Pen Pendleton would not comment.
In December, DLJ sued Infinity Home Mortgage Co. for what it said was failure to repurchase $3 million of bad loans.
EMC Mortgage Corp., a unit of Bears Stearns Cos. Inc., sued MortgageIt Inc. in February of last year over about $69.8 million of bad loans it said the lender failed to repurchase.
