Family Home & Finance Center, Inc. v. Federal Home Loan Mortgage Corp.

Proceedings: HEARING ON MOTION FOR SUMMARY JUDGMENT — COURT ORDER

Before the Court is a Motion for Summary Judgment filed under seal by defendant Federal Home Loan Mortgage Corp. (“Freddie Mac”) (Docket No. 88). A redacted version of the motion was filed on August 31 (Docket No. 123).

I. FACTUAL & PROCEDURAL BACKGROUND

Plaintiffs Family Home & Finance Center, Inc., Daisy J. Phillips, and Mark Gallagher (collectively, “Plaintiffs”) operate a mortgage brokerage business. They help borrowers obtain and refinance mortgages by soliciting mortgage applications from the borrowers and submitting the applications to lending institutions. The lenders then process the applications and fund the loans through the process of loan origination.

Until early 2005, a significant portion of Plaintiffs’ business involved the solicitation of mortgage applications that were submitted to National City Mortgage Co. (“National City”). As part of this business, Plaintiffs encouraged borrowers to apply for loans with higher interest rates. Because these loans were attractive to National City, the lender paid Plaintiffs a Yield Spread Premium (“YSP”). Plaintiffs, in turn, paid a portion of the YSP as a…