Think it’s bad out there in the world of high finance? Some folks in Pennsylvania found out that despite making all of their mortgage payments to a company that was, until recently, listed on the New York stock exchange, they were still left them worrying about whether they’d keep their homes. A short synopsis of their wake-up call appears below. Go read the rest here.

I’m not going to tell you to worry about this since George Bush says you should just be worried about the terrorists. In case you’re taking that advice, maybe this story will give your mind a much needed rest.

Welcome to the world left to us left by George Bush, Alan Greenspan, and the Republican Congress. How much worse will it get? Who knows? Maybe Helicopter Ben can save the day after all. Only time will tell.

Last Tuesday, Andy Parker got a telephone call he wasn't expecting.It was the Millersburg tax collector, who informed him that the check from his mortgage company to pay school taxes had bounced.

Like many people, part of the mortgage payment Parker makes every month goes into an escrow account that the lender uses to pay property taxes. Parker's mortgage lender, Melville, N.Y.-based American Home Mortgage Investment Corp., is required to hold the escrow money and pay the taxes when they are due. American Home Mortgage filed for Chapter 11 bankruptcy protection in Delaware on Aug. 6. The bankruptcy protects the company from creditors while it continues to operate and restructures.

That matters little to Parker, whose school taxes haven't been paid. “Bottom line, I am worried about my credit score and how it will be reported,” Parker said. “Ultimately, it remains my responsibility no matter what happens.” He’s not alone.In Upper Paxton Twp., tax collector Judy Snyder received checks this week from American Home Mortgage that bounced.

“I had four checks returned to the tune of $4,700,” Snyder said. The average check, she said, was in the amount of $1,200.

It's unclear how widespread the problem might be. American Home Mortgage in 2005 made more than 4,800 loans in Pennsylvania. It is the 10th-largest mortgage company in terms of loans originated in the state, according to the state Department of Banking.

Snyder, who has been a tax collector since 1994, said she has received worthless checks from individuals, but never from a mortgage company. “I could not believe it … when I got these back,” she said. Snyder said she tried to call American Home Mortgage this week, but nobody answered the phone.

Image Courtesy of Bits of NewsThe Insolvency Crisis: How we got here, and what to expect

Posted by Buck Batard at August 17, 2007 04:21 PM

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