American Home Mortgage Investigated for Mortgage Fraud
If you visit American Home Mortgage’s website, you’ll be greeted with the following message:
Important Notice: American Home Mortgage is unable to continue the origination or funding of mortgage loans, and no new loans are being accepted. After carefully assessing the sudden adverse impact on the Company’s business with respect to its liquidity, due to the extraordinary disruptions now occurring in the secondary mortgage and real estate markets, American Home Mortgage Investment Corp. and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
If you want one possible take on what is really going on, check out this summary of related events from Sarah Ryley at the Brooklyn Daily Eagle
American Home Mortgage — once among the nation’s 10 largest lenders before filing for bankruptcy in August and laying off most of its 7,000 employees (including 1,400 on Long Island) — is under investigation for criminal misconduct by the FBI and federal prosecutors from the Eastern District in Brooklyn, Newsday reports.
The investigation is in its preliminary stages, and is looking into whether various federal statutes such as conspiracy, securities, mail and wire fraud, and money laundering were violated, resulting in the company’s bankruptcy, according to Newsday.
“Given the hundreds of millions of dollars lost in the company’s collapse, a conviction for fraud could led [sic] to prison sentences of 10 years or more under federal sentencing guidelines.”