Connecticut Banking Commissioner Howard Pitkin Issues
Temporary Order to Cease and Desist to American Home Mortgage
August 3, 2007
Connecticut State Banking Commissioner Howard F. Pitkin issued a Temporary Cease and Desist Order and Summary Suspension Against American Home Mortgage Corp. of New York (“American”) and two of its affiliates today. The action is the result of an on-going investigation of American for possible violations of Connecticut’s mortgage banking laws. Upon receipt of the order, American is required to cease and desist from failing to timely fund loans, failing to perform agreements with borrowers, failing to cooperate with the Department and from making material misstatements. American and its affiliates are also placed on notice that a maximum fine of $1,000,000 could be levied by the Department.
“This order comes after the Department determined that American did not transfer loan proceeds for 38 loans scheduled to close in Connecticut,” Commissioner Pitkin stated. “My primary responsibility is the protection of Connecticut consumers. Therefore, in addition to issuing this order which requires the company to cease all business activities, I have also ordered American to create a separate escrow account containing all fees that consumers paid to the company, in order to reimburse those consumers whose mortgage loans did not close.”
A hearing is scheduled for August 24th to determine if the temporary cease and desist order shall become permanent and whether the company’s licenses shall be revoked. Please find the attachment containing the complete order.