MOST SHARED
- Kuoni CEO Sees Recovery in Travel Sector
- Dubai Struggles to Ease Debt Fears; Investors Rattled
- Gold Retreats from Record High as Dollar Rebounds
- US Markets Bracing for Selloff On Worries About Dubai's Debt
- China Unveils Carbon Target Ahead of Copenhagen
- UK's Darling to Downgrade 2009 Growth Forecast
- Hyundai-Kia Targets Rapid China Growth in 2010
- Fannie Mae to Tighten Lending Standards: Report
- No Thanksgiving Rest for Retailers in Sales Race
- US Markets Bracing for Selloff on Dubai Debt Worries
- US Dollar Falls to 14-Year Low Against the Yen
- No Thanksgiving Rest for Retailers in Sales Race
- UK's Darling to Downgrade 2009 Growth Forecast
- US Companies Already Moving on Curbing Emissions
- Fannie Mae to Tighten Lending Standards: Report
- Investing in Good Karma – and Making a Profit
- Retailers Should Believe in Christmas Miracles
- Bankruptcies Jump, Hitting Highest Level in Four Years
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
Text Size 
An affiliate of billionaire investor Wilbur Ross has offered to buy bankrupt American Home Mortgage's loan servicing unit for a price expected to be more than $400 million, court papers filed on Friday show.
Ross, who has profited by investing in distressed industries, formed AH Mortgage Acquisition to serve as the initial bidder for the servicing unit, which is responsible for collecting loan payments from homeowners and paying such expenses as insurance and property taxes.
To take over the unit, Ross must win a court-sanctioned auction scheduled for Oct. 5, court papers show. A hearing to approve the sale would take place four days later.
"We want to be a serious player in the mortgage industry," Ross said in an interview. "This is a first step. Unless you can service mortgages, you can't originate them."
Ross has tackled restructurings in the steel, textile and coal industries. American Home is his first U.S. mortgage bet.
The minimum purchase price would depend on the amount of loans serviced by Melville, New York-based American Home at the time of sale. Court papers suggest the amount of loans is expected to top $38 billion. American Home has said it serviced $46.3 billion of loans at the end of 2008.
American Home had been the 10th-largest U.S. mortgage lender before filing for Chapter 11 bankruptcy protection on Aug. 6. It is now liquidating assets to pay creditors.
Another Ross affiliate had previously provided $50 million of financing to keep American Home operating while in bankruptcy.
More than one dozen U.S. mortgage lenders have gone bankrupt this year, including several "subprime" lenders that provided loans to borrowers with poor credit.
American Home catered to people with better credit. It collapsed after investors stopped buying most home loans, including American Home's, apart from those they deemed safest.
"The mortgage business is a very important industry," Ross said. "Recent problems with subprime were due to poor implementation."
Ross is worth $1.7 billion, Forbes magazine said this week. Shares of American Home rose 6 cents to 36 cents on the Pink Sheets.
American Home filed for bankruptcy protection in August. Once the nation's 10th largest mortgage lender, the company said it fell victim to "extraordinary disruptions" that effectively cut off the funding it needed to make new loans.
Its 40 biggest creditors include virtually all the major names of Wall Street, with Deutsche Bank and JPMorgan Chase at the top of the list.
Print
Email
- What you need to know.
- Ever wished your cab driver would stop nattering and just get to where you're going? Well that moment is near(er).
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
Data is a real-time snapshot *Data is delayed at least 15 minutes