According to Citi, the sub-maintenance agreement with Cenlar includes other Citi-specific credits and “certain other mortgage rights” that are not sold to New Residential. In addition to the sale of mortgage service rights on approximately $97 billion outstanding principal balance to New Residential, Citi said it has also entered into a separate subserviation agreement with Cenlar, which will effectively terminate Citi`s mortgage service business. The relevant facts are as follows. In 2008, Wright-Patt Financial Group entered into a mortgage subcontract (the “agreement”) with the defendant, Cenlar FSB. doc. #2-1. Wright-Patts successor, plaintiff, myCUmortgage, LLC (“myCU”) and Cenlar amended the agreement in 2011 and again in 2015. Docs. ##2-2, 2-3.

According to myCU, Cenlar violated this agreement in several respects. In January 2017, myCU Cenlar announced that it would authorize the expiry of the agreement on May 31, 2017. According to myCU, according to Investors Savings and Atlantic City Associates, first-party compensation agreements are now categorically excluded as a matter of New Jersey law. Judge Ovington contradicted. She indicated that in gmFS, LLC v. Cenlar FSB, no 18-00582, 2019 WL 165711 (M.D. La. Jan.

9, 2019), the District Court stated that the decisions in both cases “are based on the language of the particular compensation provisions, not on a legal or legal block.” Id. at 5. As none of these provisions reflected “language reflecting the intent to authorize staff compensation,” the Tribunal found that these cases were not “particularly instructive.” Id. at 5 n.5. In GMFS, the Tribunal interpreted exactly the same contractual language in this case. As here, Cenlar was the designated accused. The GMFS court found that language 8.3 c contained a language that reflected the intention to authorize the claims of the first parties. This subsection engages the owner of the loans, Cenlar “directly or indirectly by .

. . any substantial violation of a presentation, warranty or association of the [owner] contained in this agreement. The GMFS court asked “how Cenlar could be held responsible for a third party” directly . . . . resulting from the substantial violation of the owner.

The GMFS court stated that it “cannot interpret that it would only apply to third-party claims without reading page 8.3 (c) of the agreement.” Id. at 5. In the future, Citi`s private customer service will be maintained by Citi, but will be included in the subserviation contract with Cenlar, meaning that all credits granted to Citi`s private customers will be underfunded by Cenlar. In this case, the court is not obligated to decide whether New Jersey law categorically prohibits first-party compensation agreements. Statements made in The Investor Savings Bank, Atlantic City Associates and up to a degree Travelers Indemnity certainly seem to support a categorical block for such claims. Nevertheless, as the court noted in Travelers Indemnity, such a “sweeping rule” seems to violate New Jersey`s respect for “the ability of the parties to close freely.” 594 F.3d to 255. Instead, the court must consider the language of the contract at issue. Id.

The court must read the compensation provision “as a whole in a fair and common sense manner,” interpret the provision “in plain language” and “avoid ignoring certain words or reading the treaty so that the words “unnecessary” are not used. Id.