McLean Financial Corp., a Northern Virginia mortgage banking company, has made peace with one of several lenders who charged the company with breaking contracts to provide real estate financing.

Liberty Mortgage Banking Ltd. of New York dropped its lawsuit against McLean and admitted that it "failed to comply strictly with the terms" of an agreement to sell $9 million worth of mortgage loans to McLean, according to a court order both sides agreed to last month.

McLean, a fast-growing mortgage banker that has become well-known in the area through a major television advertising campaign, also dropped its own charges against Liberty.

The order, issued by the U.S. District Court in Alexandria, was disclosed in a statement this week by McLean. The firm said it made the disclosure because of the widespread publicity caused by Liberty's charges that McLean broke its contract to buy the mortgage loans and sought to defraud Liberty.

"This court order totally vindicates McLean Financial Corp. The wild charges of a bungling mortgage banker have been proven false," said Frank M. Howard, president of McLean Financial, a subsidiary of McLean Savings & Loan Association.

Liberty Mortgage's president, Kenneth A. Ashley, also said he is "pleased with what we finally agreed to." Ashley said he could not discuss details of the settlement under terms of the out-of-court agreement, but he added: "They needed certain things for their benefit, and we needed certain things for ours. . . . I did what had to be done for the best interests of the company."

Liberty Mortgage is one of several mortgage lenders that have become embroiled in disputes with McLean Financial over commitments to buy and sell mortgage loans.

As with the other disputes, Liberty reached an agreement to sell a certain amount of loans -- in this case, $9 million worth -- over a six-month period. In return for this commitment, Liberty paid an up-front fee of $90,000, with the promise of additional payments when the loans were sold.

Such "forward commitments" to sell loans are increasingly common in the mortgage finance industry because mortgage bankers like to protect themselves against changes in interest rates.

McLean Financial, however, only bought about $1 million worth of the loans. McLean said that Liberty did not provide the proper documentation for the other loans it sought to sell, while Liberty said that McLean demanded unreasonable amounts of paperwork and never intended to buy the loans.

As part of the settlement announced yesterday, Liberty agreed to sign a court order retracting its charges against McLean and admitting that "it failed to deliver loans to McLean Financial Corp. in accordance with the specifications of its commitment agreements."

Other than dropping its own charges, McLean gave "absolutely nothing" to Liberty to obtain the settlement, said John E. Harrison, McLean's chairman.

The court judgment may prove critical to McLean's legal strategy in fighting at least a half dozen similar lawsuits. Harrison, who is also a partner at the law firm defending McLean Financial, said that his company's defenses in the other suits are similar to those in the Liberty case and that, accordingly, he expects to be vindicated in those as well.

But other attorneys disagreed, saying that circumstances of the other cases are different. "I don't think this is going to affect our case in one way or the other, nor do I think it's going to affect anybody else's cases," said Edward Rabinovitz, a Boston attorney for Commonwealth Mortgage Inc., another mortgage lender suing McLean.