American Home creditor objects to company's plan to sell loan servicing business

By Reshmi Basu

New York, Sept. 5 - American Home Mortgage Corp. creditor Countrywide Bank objected to the company's request to sell its loan servicing business, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Countrywide Bank said it purchased 1,350 of mortgage loans from American Home, which the company serviced as part of an agreement.

However, under its Chapter 11 case, American Home said it plans to sell the rights to those loans, which have an unpaid balance of $484 million.

Countrywide argued that the loans cannot be transferred to a third party nor are they the property of American Home.

According to the objection, the Alexandria, Va.-based savings and loan company said that since it terminated its dealings with American Home on Aug. 3, prior to the company's bankruptcy filing, those loans cannot be auctioned off.

In addition, Countywide contended that the related mortgage files and funds are not property of American Home.

As previously reported, the auction for American Home's mortgage loans servicing business will be held on Sept. 24 while the sale hearing will take place on Oct. 1.

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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