Division of Banks Announces Actions Against Several Mortgage Entities

The Division of Banks (Division) today issued a cease and desist order against American Home Mortgage Investment Corporation's three licensed subsidiaries: American Home Mortgage Corporation, also doing business as American Brokers Conduit, American Home Mortgage Acceptance, Inc., and American Home Mortgage Ventures, LLC. (collectively referred to as American Home). An additional cease and desist order was issued to the unrelated company, Alliance Mortgage Banking Corporation (Alliance Capital).

American Home

American Home is a licensed mortgage lender and mortgage broker headquartered in Melville, New York with several branch offices located in Massachusetts. Over the past few weeks, American Home has endured significant financial losses due to mandatory loan buybacks and margin calls.

Today's action resulted from American Home's severe financial weaknesses and inability to timely fund loans. Thirty-eight loans in Massachusetts were scheduled to close this week but were not funded. The Division acted to prohibit American Home from accepting new applications due to serious concerns about the company's financial condition and to protect Massachusetts consumers from any further harm.

Similar action against American Home was coordinated with several other state bank and mortgage regulators. The Division's Order requires the company to either immediately fund all closed and approved loans on the committed terms or place all remaining loans with a qualified lender with no loss to consumers. The Order also forbids the company from initiating any new mortgage loan transactions.

Resources for Consumers

In anticipation of the number of customers impacted by the closing of American Home, the Division has been working with representatives of the mortgage lending industry to identify mortgage lenders and mortgage brokers willing to take former customers of American Home.

If a consumer has a pending application with American Home, they are urged to contact their mortgage broker, if applicable, to place the loan with a qualified lender. Alternatively, consumers can call the Division's Mortgage Hotline at ( 800) 495-2265, extension 1501.

"The hotline is an important consumer resource and I encourage all individuals with concerns to call," said Commissioner of Banks Steven L. Antonakes. "The Division of Banks is working with other licensed mortgage lenders and mortgage brokers in Massachusetts to assist consumers impacted by the problems with American Home."

In addition, any time a consumer believes they have been a victim of unfair or deceptive practices in a residential mortgage transaction, they should call the Mortgage Hotline.

Alliance Capital

Alliance Capital is a licensed mortgage lender and broker based in Levittown, New York. The order was issued due to the company's failure to notify the Division of regulatory action in another state and financial weaknesses stemming from the termination of their existing line of credit. No Massachusetts loans are in the pipeline or remain unfunded.