Federal Deposit Insurance v. Source One Mortgage Services Corp.

MEMORANDUM

TAURO, Chief Judge.

I

Background

On September 13, 1991, the Federal Deposit Insurance Corporation (“FDIC”), as receiver for the insolvent First Mutual Bank for Savings (“First Mutual”), notified Source One Mortgage Services Corporation (“Source One”) that it was disaffirming a 1986 mortgage servicing agreement held by Source One, effective November 30, 1991. At that time, Source One was holding more than $4.1 million in funds for the FDIC as receiver of First Mutual.

Although the FDIC’s notice only referred to the 1986 servicing agreement, Source One “netted out” over $3.5 million it…