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The ongoing battle in federal court over the fallout from the CU National mortgage scandal continues.

In that scandal, Michael McGrath, an executive of CU National, which was owned by U.S. Mortgage, sold some CU-originated mortgage loans to Fannie Mae even though the CUs had not authorized those sales. He also failed to turn the proceeds from those sales over to the CUs and then hid the sales from the credit unions. The fraud succeeded and continued until the CUs found out about the fraud through a third party. McGrath has since pleaded guilty and is awaiting sentencing.

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