Webster Financial Corp., Waterbury, Conn., received court approval to settle longstanding litigation over a condominium project in Columbus, Ohio, that had previously resulted in an almost $19 million verdict.
Under the settlement, Webster Bank will pay $10.5 million to Community Building Systems Inc., the developer of the Broadwin condominium conversion project, and some who originally purchased units in the building, according to a recent Securities and Exchange Commission filing.
Webster Bank will also provide a quitclaim deed to the condominium units owned by a Webster affiliate to a designee of Community Building.
In June 2007, Community Building filed the lawsuit over the bank’s refusal to continue to fund certain construction draws on the Broadwin development. The project was structured as 24 individual loans to the unit purchasers, with the developer guaranteeing repayment to Webster. Later, some of the unit purchasers and others joined the lawsuit as plaintiffs.
In May 2010, a jury found in favor of the developer and the unit purchasers who remained in the suit, awarding them roughly $18.9 million in compensatory and punitive damages, according to an August 2010 SEC filing. As a result, the company recorded a reserve for the aggregate verdict in the second quarter of 2010 and an additional amount for expenses, according to a May 2011 regulatory filing.
With the settlement, the $18 billion-asset company said that it will record a pretax benefit of about $9.5 million for the quarter ending Dec. 31.
Daily Briefing | Wednesday, November 23, 2011
PMI Files for Chapter 11 Bankruptcy
The PMI Group Inc., Walnut Creek, Calif., has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.
Conforming Loan Limits Rising in Only One County in 2012
Only one county in the countryFairfield, Conn.will have a higher conforming loan limit in 2012. The ceiling in the other 3,200-plus counties will remain unchanged.
30-Year Rate Slips Below 4% Again
The average weekly rate for a 30-year loan slipped slightly below 4% and rates for adjustable-rate mortgages averaged new record lows in Freddie Mac’s survey Wednesday.
Freddie Reports Higher Refis Delinquencies
Freddie Mac reported a 24% jump in refinancings from September to October while total loan volume rose by less than 4%.
Massachusetts Foreclosure Activity Reverses Yearlong Trend
After more than a year of declines, foreclosure activity rose in Massachusetts in October, according to the Boston-based real estate data publisher The Warren Group.
FHFA, GSEs: Dec. 1 UCDP Deadline Will Be Enforced
The government-sponsored enterprises’ Uniform Mortgage Data Program has been marred with delays and setbacks since the earliest steps began at Fannie Mae two-and-a-half years ago with the precursor to the Uniform Collateral Data Portal, the technology platform that will accept full electronic appraisal reports in a new XML-formatted data file.
Purchase Apps Up But Refinancings Sink
Application volume fell by 1.2% on a seasonally adjusted basis for the week ended Nov. 18, as purchase apps were up to their highest level since August, but refinancings were down to their lowest point since July, according to the Mortgage Bankers Association. The data for the previous week (Nov. 11) was adjusted to take into account Veterans Day.
Permits Up Again in California
For the third consecutive month, builders in California pulled an increasing number of permits compared to the previous year.
Lennar Adds to Debt Offer
Lennar Corp. has upsized its senior debt offering to $350 million and priced it at a 3.25% interest rate. It first proposed selling $300 million in debt. The over-allotment for the offering was also increased to $50 million from $45 million.