American Home has sold their loan-servicing rights; maybe you can get some answers out of this "W.L. Ross" firm:

Ross to Buy Block Mortgage Service Unit
By SHEFALI ANAND
March 18, 2008; Page C7

Even though mortgage lending is mired in its worst crisis in decades, investor Wilbur Ross thinks there is money to be made in servicing such loans.

Mr. Ross announced yesterday that his investment firm, WL Ross & Co., would buy the mortgage-servicing business of tax-preparation firm H&R Block Inc. for around $1.1 billion. He previously bought the mortgage-servicing rights of subprime lender American Home Mortgage Investment Corp for around $500 million. American Home filed for bankruptcy protection last August.

Together, the two units will handle nearly $100 billion of loans, the second-largest servicing business for subprime loans after mortgage lender Countrywide Financial Corp., Mr. Ross said in a statement. Countrywide is being acquired by Bank of America Corp.

Mr. Ross has a history of buying distressed companies at rock-bottom prices, reorganizing them and selling them at a profit. One of his most successful investments was in the steel industry, in which he rolled up bankrupt steel companies to create International Steel Group, which he sold for $4.5 billion in 2005 at a $260 million profit. In recent years, he has invested in coal-mining and auto-parts companies.

As the credit crunch widens, Mr. Ross is looking for value in new areas. This month, he bought $1 billion in municipal bonds, which have been hammered because of concerns about the stability of bond insurers. In February, Mr. Ross announced he would invest as much as $1 billion in shares of bond insurer Assured Guaranty Ltd., which had come under pressure along with other insurers because of their mortgage exposure.

"Notwithstanding the problems of the subprime lending industry, we regard mortgage servicing as an attractive business," Mr. Ross said in a statement yesterday.

Servicing companies collect mortgage payments, assess late fees and, in case of delinquencies, often tackle thorny collection issues or even foreclosure on behalf of mortgage bondholders. Subprime collections are often more profitable for mortgage servicers.

Given the current crunch and increasing delinquencies on low-quality mortgages, servicing costs will rise, but analysts say firms likely will raise the fees they charge.

"Subprime servicing took a little more work, but it was always pretty profitable," said Bose George, an analyst at Keefe, Bruyette & Woods Inc.

While mortgage originations have slowed, servicing companies are still needed to manage the millions of mortgages outstanding.

For H&R Block, the sale is a step toward focusing on its core business of tax-preparation. That has been the goal of activist investor Richard Breeden, who took over as chairman of the Kansas City, Mo., company last year after a proxy battle.

The company's Option One Mortgage Corp., which included both origination and servicing businesses, was a source of losses last year. A prior plan to sell the unit to Cerberus Capital Management LP fell apart. H&R Block closed the mortgage-origination unit in December and then sought buyers for the more valuable servicing rights.

H&R Block shares rose 89 cents, or 5.1%, to $18.36 as of 4 p.m. in New York Stock Exchange composite trading.

WOW! I can see Tricia parlaying her experience in the field to 'pay' for the house! She could work part-time for Ross in exchange for the property. A win/win situation.

Way back shortly after the BK was filed American Home lined up $50 million in debtor-in-possession financing from WL Ross & Co. Ross also purchased the servicing rights on some of the loans. We contacted them & they swear they do not have our house in their data files. We've contacted the Trustee with the same results.

The article I posted above noted that the "lost" mortgages date from after September 2005. Hmmmm The mortgage we're trying to trace is dated September 7, 2005.

There was a foreclosure auction held on site at the property last June. DH & I attended with a $70K check in hand for a bidder's number. The auction was a farce. Then, apparently, the foreclosure deed didn't get recorded prior to AHM BK filing & so the foreclosure has been stayed.

We've been in touch with the owner who has moved out-of-state & abandoned the property. He's even sent us keys so we've had access for months. We told him there was a roof leak & a plumbing leak (the house was never winterized)...he told us he'd send somebody out to make repairs but that's never happened & was months ago now.

The taxes aren't paid either. I was hoping, in December or January, some entity would pay the taxes & I could contact them...but nope. Taxes are delinquent.

Oh well. Shame. It's a very nice property...or was.

/tricia

Tricia, maybe you need to find out how to work on the team that sorts through the paperwork in storage? If anyone can figure this mess out, my guess is that you can. Hopefully the full paper trail is in the box.

Good luck. I've been wondering if there was anything new going on. Hopefully your patience will pay off. Would it benefit you to pay the taxes? Could you even do that?

American Home Mortgage has files for 490,000 loans sitting in a warehouse (at a cost of $45,000 per month), and it can't even figure out who owns the loans because they've been bought and sold so many times since they were issued sometime after September of 2005.

So American Home Mortgage has a brilliant idea for what to do with them: Burn them!

Just as I think I've heard everything about the mortgage mess, something else surfaces. This is a shocking situation, but oddly I'm not shocked.

Wow, if they burn the paperwork, what happens to the property? Wouldn't it be anyone's stab at claiming it then, since there's no proof who owns it? I think you responded to one of my posts a few weeks ago, "How to find out about bank owned property". I'm conisdering moving in next door for adverse possession. ;) In Utah, it's only 7 years. If I would've done it when the people moved out, I'd only have about 5 years left to call it my own. With it buried so deep in who knows where, it could take several more years to figure it all out. I can't believe the banks don't get on these "lost" properties and try to unload them somehow.

Re adverse possession -- why don't you send AHM's legal counsel a registered letter informing them that since both the former owner and the mortgage-holder have abandoned the property (as evidence by the non-payment of property taxes and failure to make repairs), you intend to move into the house and begin to perfect a claim of adverse possession on such and such a date?

That might well get their intention so that you can start negotiations.

freedingfrenzy,

You present a good idea. One that we've already pursued. AHM's counsel just refers us to the Trustee. The Trustee doesn't give a d@mn what we do with the house because they say it's not in their AHM data base. Yet, sitting down at Town Hall lives a recorded mortgage, forever a part of this property's history, saying that AHM has a lien against the title. Sigh. Ahem.

Actually, the mortgage holder is American Conduit which was/is a wholly-owned subsidiary of AHM & included in the Delaware BK proceedings.

/tricia

Looks like you may have to wait for the tax foreclosure sale. It will be a while but if you still want the house you could get it for a very low price at that point.

Tricia,

It's a long shot as I don't think American Brokers Conduit did many FHA/VA loans, but is this one any way government backed?

Nope. The loan was to a builder/flipper.

/tricia

Then why not start paying the taxes, make the repairs and move in? If AHM ever gets its act together, you could negotiate with them on a suitable sum to pay off the lien and get clear title. If not, at some point down the road, you could file an action to quiet title and have the lien extinguished if AHM doesn't respond or can't prove that it owns the mortgage,

Yes, feedingfrenzy, we toy with that possibility almost daily. Frankly, our largest worry is that if we do move in & then, down the road, everything goes wrong...well, DH is an attorney & we're concerned he may lose his license to practice law. He's also executive management at a financial institution & sits on one of the agencies' Advisory Boards. Being a part of something like that it would make the papers & would likely cost him his job...4 years from retirement. :( Our local counsel says, "If it were me I'd move in. But, I'll NOT advise YOU to move in!" rofl (D@mn attorneys...aren't good for anything!)

But, we continue to plan & plot! lol

/tricia

Glad to see an update. Sad to see it's not resolved. Yet. I think you'll get to the right person eventually. If anybody can - it's you!