DEL MAR, Calif. - American Residential Investment Trust Inc. filed a lawsuit Wednesday in which it accused Lehman Capital, a division of Lehman Brothers Holdings, Inc., of violating the terms of an agreement to sell American Residential a pool of residential mortgage loans in late 1997 and early 1998.
The lawsuit, filed in California Superior Court in San Diego, also names Long Beach Mortgage Co., now a unit of Washington Mutual Inc., as a defendant. Lehman Capital had acquired the loans from Long Beach.
According to the suit, Lehman Capital "breached their obligations to American Residential" when it failed to reimburse American Residential for some of the loans that did not perform well, either because of prepayment or default.
The suit also claims the poor performance of the pool hurt American Residential's earnings for 1999 and 2000.