Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Triad Guaranty Insurance is defendant in lawsuit
Winston-Salem Journal, NC -Saturday, November 10, 2007

Triad Guaranty Inc. said yesterday in a regulatory filing that a lawsuit was filed Monday against its subsidiary, Triad Guaranty Insurance Corp., by American Home Mortgage Investment Corp. and American Home Mortgage Servicing Inc. The complaint was filed in the U.S. Bankruptcy Court for Delaware. The plaintiffs are debtors and debtors-in-possession in Chapter 11 cases. They are suing for breach of contract and asking for monetary damages and a declaratory judgment.

Triad Guaranty said that American Home Mortgage Corp. was its largest customer for the first half of 2007. American Home Mortgage filed for bankruptcy protection during the third quarter. Triad Guaranty said it received “extremely limited production” from the company in the third quarter and doesn’t expect any future business.

The lawsuit focuses on Triad Guaranty’s decision to cancel its certification of American Home Mortgage’s coverage on 14 loans “due to irregularities that we allegedly uncovered following the submission of claims for payment and that existed when American Home Mortgage originated the loans.” American Home Mortgage said in the lawsuit that the decision resulted in a loss of at least $1.1 million. Triad Guaranty said it expects to rescind more loans originated by American Home Mortgage.

AHM accused of providing faulty mortgage data
Newsday, NY - Nov 8, 2007 by Daniel Wagner
 
A mortgage insurer has accused bankrupt Melville-based lender American
Home Mortgage of "relying on misrepresentations of borrowers
and appraisers," according to a complaint that American Home filed against
Triad Guaranty Insurance Corp. earlier this week.

In the complaint, American Home argues that it sustained losses of at least
$1.13 million because Triad has refused to cover losses based on 14 mortgage
loans on which borrowers had defaulted. American Home required many of its
high-risk borrowers to sign up for private mortgage insurance with
Winston-Salem, N.C.-based Triad and other companies.

In reviewing documentation of the defaulted loans, Triad allegedly discovered

"irregularities" including negligent analysis by property appraisers,
misrepresentations by borrowers of their incomes and debt loads, and
incomplete loan applications, the complaint says. American Home maintains
Triad has no basis for refusing to cover the losses, and says it cannot
recover its losses by foreclosure.

Many of the dispute's details are unknown because the complaint, filed in U.S.

bankruptcy court in Wilmington, Del., was redacted. Mortgage insurers like
Triad have suffered substantial losses this year as weak underwriting of
mortgage loans has come to light. 
Copyright © 2007, Newsday Inc.
 
American Home's Court Blitz  -  Forbes, NY - Nov 8, 2007
 
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http://www.sec.gov/Archives/edgar/data/911631/000095014407010185/g10479e10vq.htm#111
 
From: Triad Guaranty Inc. FORM 10-Q
 
Item 1. Legal Proceedings
 
On November 5, 2007, American Home Mortgage Investment Corp. and American Home Mortgage Servicing, Inc. filed a complaint against Triad Guaranty Insurance Corp. in the U.S. Bankruptcy Court for the District of Delaware. The plaintiffs are debtors and debtors in possession in Chapter 11 cases pending in the U.S. Bankruptcy Court. The lawsuit is an action for breach of contract and declaratory judgment. The basis for the complaint’s breach of contract action is the cancellation by us of our certification of American Home Mortgage’s coverage on 14 loans due to irregularities that we allegedly uncovered following the submission of claims for payment and that existed when American Home Mortgage originated the loans. The complaint alleges that our actions caused American Home Mortgage to suffer a combined net loss of not less than $1,132,105.51 and seeks monetary damages and a declaratory judgment. We expect to rescind additional loans originated by American Home Mortgage and we intend to contest the lawsuit vigorously.

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