Lender wants to sell bad mortgages
WASHINGTON—American Home Mortgage Investment Corp. wants bankruptcy court permission to sell pools of mortgages in which borrowers are behind in their payments and owe $164 million in principal on the loans.
The failed mortgage lender has asked the U.S. Bankruptcy Court in Wilmington, Del., to approve a Feb. 13 auction for the mortgage loans, according to court documents filed last week.
American Home has proposed to sell three pools of 618 non-performing loans in which payments are more than 60 days past due. That total could change if borrowers catch up on their payments or more fall behind.
American Home is one of many mortgage lenders that have been forced into bankruptcy due to the credit crunch. It has been selling its assets and winding down its business free credit reports. In October, the bankruptcy court approved the sale of American Home’s loan-servicing business to Wilbur Ross’ private-equity firm.
According to court papers, a pool of 83 loans are subject to liens by American Home’s bankruptcy lenders, including the entity set up by Ross to buy the loan-servicing business. Another 208 loans are subject to liens by Bank of America Corp. JPMorgan Chase & Co. has an interest in the remaining 327 loans.
American Home has proposed a Jan. 25. deadline for interested buyers to submit indicative bids and a Feb. 11 deadline for formal, binding bids.
The bankruptcy court will consider American Home’s request at a Jan. 14 hearing.