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News Now

CU System
Bank wins 27 million judgment vs. mortgage CUSO CEO
WAUWATOSA, Wis. (3/2/09)--A Wisconsin court has awarded a bank a $2.7 million judgment against a mortgage company run by the former CEO of Central States Mortgage, a credit union service organization (CUSO). U.S. Bank was awarded the judgment against Interim Funding LLC of Wauwatosa, Wis., a firm owned by Dick Jungen. Jungen is founder and a former CEO of Central States Mortgage, which is 70% owned by a consortium of credit unions (MSNMoney.com Feb. 26). The bank had sued Jungen and five other executives of Interim, including three former Central States Mortgage employees, in November. The suit alleged the bank provided a $3 million revolving loan to Interim Funding in 2005. The bank said the company defaulted on the note and owed $2.7 million plus interest. The company agreed to the judgment on Feb. 19 without a trial, but several of the defendants did not agree and have switched attorneys. Jungen was fired from Central States Mortgage in July 2008 after the CUSO learned he secretly controlled Interim Funding. Interim Funding acted as a wholesaler, according to a separate lawsuit filed on Feb. 2 by the CUSO against Jungen and other executives of Interim Funding. The suit alleges they scammed the CUSO out of $15 million (Business Journal of Milwaukee Feb. 13). In the U.S. Bank case, Interim Funding agreed to the judgment Feb. 19 in Milwaukee County Circuit Court. A hearing is scheduled for June 29 on U.S. Bank's motion for a summary judgment.


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