Credit Suisse Looks to Pull Servicing Contract from American Home
Credit Suisse is looking to pull $46 million worth of loans owned by an affiliate of the investment bank from the servicing arm of bankrupt lender American Home, according to a story on Bloomberg. The company’s servicing operations continue to operate while the company progresses through the bankruptcy process:
American Home Mortgage Investment Corp., the second-biggest U.S. residential lender in bankruptcy, may be forced to stop servicing $46 million worth of loans owned by a unit of Credit Suisse Group.
U.S. Bankruptcy Court Judge Christopher S. Sontchi in Wilmington, Delaware, said he would conclude a hearing tomorrow on whether American Home must stop collecting payments and providing other services on the loans, owned by Credit Suisse First Boston Mortgage Capital LLC. Credit Suisse sued American Home, asking Sontchi to force American Home to stop servicing the loans.
“There is simply no provision for them to retain the servicing contract,” Credit Suisse attorney Howard B. Comet said in court today.
The total amount here is less than 1 percent of American Home’s $57 billion servicing portfolio, and American Home says the Credit Suisse didn’t properly terminate a servicing contract. A judge was set to rule today on the matter, but I haven’t seen an update just yet.