American Home Facing Investigation
Maryland has announced that it will be opening an inquiry on American Home Mortgage after it defaulted on its tax payments to the state. According to the AP:
The Maryland Commissioner of Financial Regulation filed an inquiry with American Home Mortgage on Friday. Melville, N.Y.-based American Home Mortgage has five days to respond to the letter, said Joseph Rooney, the deputy commissioner for Maryland’s financial regulator.
Officials in New York and Washington state are also looking into bounced checks there.
Mortgage servicers typically collect property tax payments each month with a borrower’s mortgage payment. The property taxes are then placed in an escrow account and held until property tax bills are due. Because they are placed in an escrow account, funds should always be available to make the payments.
The Maryland regulator asked American Home Mortgage to explain why the initial checks failed to clear and to clarify the scope of the incident, Rooney told The Associated Press.
Having a mortgage with an ailing lender should be a cause for concern for any homeowner. American Home’s failure to pay the property taxes for its borrowers could potentially result in borrowers losing their homes to tax auctions. This serves as an excellent motive to pay off mortgage loans early.
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