American Home Mortgage loan servicing asset sale bid procedures approved

By Caroline Salls

Pittsburgh, Aug. 9 - American Home Mortgage Investment Corp. obtained court approval of the bid procedures for the proposed sale of its loan servicing assets, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, no stalking horse bidder has been selected.

The loan servicing includes collecting and remitting loan payments received from borrowers, making required advances, accounting for principal and interest, customer service, holding escrow funds for payment of taxes and insurance and contacting delinquent borrowers and arranging foreclosures.

American Home said it collected roughly $145 million in servicing fees in 2006 on $46.3 billion in mortgage loans to yield $37 million in servicing income.

Bids are due Sept. 6 and must include a $5 million deposit.

At auction, bids for the loan servicing assets must be made in increments of at least $1 million more than the previous bid.

The auction will be held Sept. 10, and the sale hearing is scheduled for Sept. 17.

American Home, a Melville, N.Y.-based real estate investment trust focused on residential mortgage loans, filed for bankruptcy on Aug. 6. Its Chapter 11 case number is 07-11047.

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