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News Release

New Jersey Department of
Banking and Insurance


Commissioner Steven M. Goldman

For Immediate Release:
August 3, 2007

For Further Information:
Jim Gardner (609) 292-5064


DOBI takes action to revoke license of two New York-based mortgage lenders

With loss of funding, affiliated companies no longer able to fund home loans

 

TRENTON – For the second time in as many days, New Jersey Department of Banking and Insurance Commissioner Steven M. Goldman has taken preliminary steps to revoke the license of mortgage lenders operating in manner contrary to the state’s lending laws.

Goldman signed a cease and desist order and an order to show cause directing American Home Mortgage of New York and American Home Mortgage Acceptance, Inc. to immediately stop taking mortgage applications in New Jersey, and stop closing home loans without available funding. In addition, the companies are ordered to secure alternate funding sources for those loan applications that are in process, and to provide daily reports on the progress of these efforts. The companies are also asked to show cause as to why their mortgage lending licenses should not be revoked.

Both companies list their headquarters as Melville, N.Y., with a principal New Jersey office in Iselin. Earlier this week, the companies shuttered offices in New Jersey and nationwide after losing their funding sources. DOBI is in the process of determining how many borrowers have been affected.

The DOBI order names five specific violations of New Jersey’s Licensed Lenders Act, including:

  • Ceasing the distribution of funds for mortgage loans that had closed or were approved for closing;
  • Failure to deliver funds following the closing of loans;
  • Taking mortgage loan applications with knowledge that the loans could not be funded;
  • Closing offices in New Jersey without proper notification to the Department;
  • Insolvency.

 

The companies have 20 days to request an administrative hearing objecting to the order. If no hearing is requested, the order will then become final.

Goldman advised consumers who have recently submitted an application with American Home Mortgage or American Home Mortgage Acceptance to contact their mortgage broker and ask them to find a new lender.

Additional information will be posted on the DOBI Web site as it becomes available at www.state.nj.us/dobi/. Individuals with questions regarding a loan pending with American Home Mortgage or American Home Mortgage Acceptance may call the DOBI Consumer Hotline at (609) 292-7272.

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More information for consumers... More information for mortgage brokers...

 
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