Fortress-Owned Mortgage Lender Faces Penalties In S.C. Lawsuit

Aug 15 2011 | 1:54pm ET

According to Fortress Investment Group, mortgage lender Springleaf Finance Corp. is worth $150 million. But the company could be on the hook for almost half that under a South Carolina state court ruling.

Springleaf, which Fortress bought 80% of from American International Group last year for $125 million, could face damages of as much as $68.7 million. The court ruled late last month that more than 9,000 people were entitled to damages of between $1,500 and $7,500 each under a state law protecting mortgage borrowers.

The court is still to issue a final order, which will include any possible penalties, in the case, which was filed in 1996.

Evansville, Ill.-based Springleaf said it will continue to "vigorously" defend itself against the lawsuit.

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