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MENDRALA v. CROWN MORTG. CO.

No. 91-1358.

955 F.2d 1132 (1992)

Stanley MENDRALA and Isabelle J. Mendrala, Plaintiffs-Appellants, v. CROWN MORTGAGE COMPANY, an Illinois corporation, and Federal Home Loan Mortgage Corporation, a corporation of the United States, Defendants-Appellees.

United States Court of Appeals, Seventh Circuit.

Decided February 3, 1992.

Attorney(s) appearing for the Case

Philip S. Aimen (argued), Donald J. Brooks, Chicago, Ill., for plaintiffs-appellants.

Nancy K. Needles, Asst. U.S. Atty., Office of the U.S. Atty., Civ. Div., Appellate Section, David I. Herbst, Ronald A. Damashek (argued), Portes, Sharp, Herbst & Fox, Chicago, Ill., for defendants-appellees.

Before CUDAHY and EASTERBROOK, Circuit Judges, and MOODY, District Judge.

CUDAHY, Circuit Judge.

This case asks us to decide whether the Federal Home Loan Mortgage Corporation (FHLMC) may be bound or estopped by the unauthorized actions of its loan servicer. It also presents the issue whether the FHLMC is a "federal agency" for purposes of the Federal Tort Claims Act. We affirm in part, reverse in part and remand.

I.

In April 1984, the Mendralas borrowed $110,000 from Crown Mortgage Company to finance the purchase of an...

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