American Home Mortgage Files For Bankruptcy
American Home Mortgage Investment Corp. filed for bankruptcy protection on Monday and two other mortgage lenders said they were not accepting new applications, signs that the worst housing crunch in decades could be widening.
American Home Mortgage, based in Melville, N.Y., and once the nations 10th largest mortgage lender, said it fell victim to extraordinary disruptions that effectively cut off the funding it needed to make new loans. Falling home prices and a spike in payment defaults scared investors away from mortgage debt, including bonds and other securities backed by home loans.
Houston-based Aegis Mortgage Corp. said it would not accept any more applications and said it could not meet all of its existing funding obligations. Cleveland-based National City Corp. also stopped taking applications for new loans and lines of credit in its wholesale home equity unit.
We are in a market now where value is a fleeting concept, JMP Securities analyst Steven C. DeLaney said of the vanishing appetite among investors for the bundles of mortgage debt that had been the funding lifeline for the industry. The market today has just basically shut down.
As the market for mortgage debt suddenly shrinks, people trying to borrow for home purchases or refinance their existing homes are facing tougher terms and stricter standards and are much more likely to be turned down than just a few months ago, when the industry was pushing loans even at buyers with bad credit histories.
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Order Expunging Lis Pendens
Re: Dkt. Nos. 41, 51, 53, 54
Defendants moved for an order expunging the lis pendens recorded against the property at issue in this case. Defendants’ motion was scheduled for hearing on January 23, 2015. Pursuant to Civil Local Rule 7-1, the Court determines that this matter is appropriate for resolution without oral argument and VACATES the hearing. For the reasons set forth below, the Court GRANTS defendants’ motion to expunge.
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Article: American Home Mortgage Investment Corp V Lehman Bros Inc: Repurchase Agreement Safe Harbors Subordinated Notes Article 9 Of The Ucc
Thacher Proffitt has published an article entitled American Home Mortgage Investment Corp. v. Lehman Bros. Inc. : Bankruptcy Court Broadens Repurchase Agreement Safe Harbors to Include Subordinated Notes Secured by Mortgage Loans and Limits the Application of Article 9 of the UCC .
A summary of the article:
On May 23 2008, in American Home Mortgage Investment Corp. v. Lehman Brothers, Inc., the United States Bankruptcy Court for the District of Delaware held that a transaction involving the purchase and sale of subordinated notes secured by mortgage loans was a “repurchase agreement” and a “securities contract” entitled to the financial contract safe harbor protections of sections 559 and 555 under the Bankruptcy Code. In so deciding, the Court found that the subordinated notes were “interests in mortgage loans.” In addition, the Court ruled that the “commercial reasonableness” standard of Article 9 of the New York Uniform Commercial Code did not apply to the foreclosure and liquidation of the subordinated notes subject to the repurchase agreement. Am. Home Mortgage Inv. Corp. v. Lehman Bros. Inc., et al. , No. 07-11047, Adv. Proc. No. 07-51739, 2008 WL 2156323 .
Findings Of Fact And Temporary Order To Cease And Desist
In the Matter ofAMERICAN HOME MORTGAGE CORP. d/b/a American Brokers Conduit Melville, New YorkMortgage Company License No. MC1368, et al.and its affiliates,AMERICAN HOME MORTGAGE ACCEPTANCE, INC. Melville, New YorkMortgage Lender License No. ML2664, andAMERICAN HOME MORTGAGE VENTURES LLCMelville, New YorkMortgage Company License No. MC5032
The Commissioner of Banks having determined that AMERICAN HOME MORTGAGE CORP. d/b/a AMERICAN BROKERS CONDUIT, AMERICAN HOME MORTGAGE ACCEPTANCE, INC. and AMERICAN HOME MORTGAGE VENUTURES LLC , all of which are located at 538 Broadhollow Road, Melville, New York, have engaged in, or are engaging in, or are about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 255E and applicable regulations found at 209 CMR 42.00 et seq., hereby issues the following FINDINGS OF FACT AND TEMPORARY ORDER TO CEASE AND DESIST pursuant to General Laws chapter 255E, section 7.
FINDINGS OF FACT
B. Impairment of Lender Lines of Credit Used to Fund American Home Mortgage’s Lending Operations
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American Home Mortgage Investment Corp’s Delay In Selling Its Mortgage Loan
American Home Mortgage Investment Corp.’s delay in selling its mortgage loan holdings has had “disastrous” results for Bank of America Corp. and other lenders to the failed mortgage company, an attorney for the bank said last Wednesday.
The attorney, Margot Schonholtz, said at a court hearing that the banks, who are owed at least $500 million, would have been paid in full had American Home opted to sell a portfolio of 3,400 mortgages last year. Those mortgages, American Home’s largest remaining asset, have a total face value of $570 million. Because the company opted to delay the sale, the banks would get back barely $350 million of what they’re owed if the loans were sold now, Schonholtz said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del. “The value of the portfolio of mortgage loans has headed in one direction .and that direction is down,” Schonholtz said.
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Wl Ross Acquires Loan Servicing Unit Of American Home Mortgage
Clients WL Ross & Co. LLC
Jones Day provided advice to WL Ross & Co. LLC, the stalking horse bidder, in its $435 million acquisition of the loan servicing unit of bankrupt American Home Mortgage Investment Corp. In addition to the acquisition representation, Jones Day also advised on financing and real estate matters.
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Warn Act Class Action Law Suit
On August 8, 2007, Outten & Golden LLP filed suit against American Home Mortgage Corp, American Home Mortgage Acceptance, Inc., American Home Mortgage Servicing Inc., American Home Mortgage Investment Corp., and American Home Mortgage Holding, Inc. seeking to recover 60 days wages and benefits for former employees of American Home Mortgage who they contended were terminated on or about August 3, 2007 in violation of the Worker Adjustment and Retraining Notification Act. . On December 14, 2009, the court approved a final settlement valued at $6.5 million for the former employees of American Home Mortgage. As of May 5, 2013, no monies had been distributed as “The Trustee continues to work to resolve claims and pending litigation which will impact the timing of distributions to AHM creditors, including the WARN Class”.The warn act settlement was distributed in 2014.
American Home Mortgage Investment Corp
Posted by admin on Feb 9, 2016 in Claims
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