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American Home Mortgage Servicing Inc. Responds to Ohio Attorney General

"Given our strong commitment to keeping borrowers in their homes and the specific, positive feedback we have received from many Ohio state and non-profit agencies regarding our homeownership preservation efforts, AHMSI's management was dismayed when it received a letter last week from the Ohio Attorney General's office threatening to sue AHMSI for unfair servicing practices," said Executive Vice President and Chief Legal Officer Jordan Dorchuck. "We offered to meet with representatives of the Attorney General in an attempt to resolve any issues they may have regarding our servicing practices. The Attorney General's office refused to discuss its allegations prior to instituting a lawsuit against AHMSI and indicated that it intended to file suit today. Rather than wait to be named as a defendant in a suit that AHMSI considers to be rash and without merit, we elected to petition an Ohio state court for a declaration that AHMSI's servicing practices are fully compliant with Ohio law. AHMSI is proud of its many successful efforts to assist distressed homeowners and looks forward to judicial resolution of any questions that any party might have about our performance." Dorchuck further stated: "Although we respect the Attorney General's commitment to serve the people of Ohio, we are convinced that these allegations are entirely without merit, and intend to defend ourselves vigorously against them."

Founded in April 2008 in the midst of the mortgage crisis, AHMSI specializes in servicing distressed residential mortgage loan portfolios. It did not originate any of the more than 500,000 loans it services, including approximately 17,000 loans in Ohio. In the year and a half since it commenced operations, AHMSI has grown from 300 employees to more than 3,000. Many of these new associates were hired to support the company's industry-leading foreclosure prevention efforts. With a large staff in place, the company maintains high customer service standards and has established processes for working closely with borrowers to resolve any questions, concerns and complaints.

AHMSI has worked actively with borrowers in Ohio who have encountered difficulty meeting their loan obligations. Among other things:

• AHMSI has participated since late July 2009 in the federal Home Affordable Modification Program (HAMP). Every AHMSI Ohio customer who is potentially HAMP eligible, including borrowers whose loans were in foreclosure, has received a HAMP solicitation letter.
• Prior to its participation in HAMP, AHMSI had developed a vigorous and creative loan modification program to help distressed borrowers.
• AHMSI is a member of the HOPE NOW Alliance and its senior executives play a leadership role in the organization.
• AHMSI has a dedicated Homeownership Preservation Office and has participated in many Ohio homeownership preservation outreach events in the past year, bringing its specialists onsite for face-to-face meetings to address borrowers' loan modification needs.
• Since October 2008, over 2,200 AHMSI customers in Ohio have entered into non-HAMP loan modifications, and an additional 173 customers are currently proceeding under HAMP trial modifications.
• In the year ending September 2009, AHMSI also worked with 141 Ohio borrowers to sell their homes with a short payoff, rather than proceeding to foreclosure.

Nationwide, during the twelve months ended September 30, 2009, AHMSI completed more than 67,000 non-HAMP modifications, which represents more than 15 percent of its entire servicing portfolio, and initiated more than 6,800 HAMP modifications. In 79 percent of its non-HAMP modifications, borrowers experience a reduction in principal and interest payment, with the average reduction being 30.5 percent. AHMSI's non-HAMP modifications for the year ended September 30, 2009, show that 74.8% of AHMSI borrowers with modified loans are performing after six months, compared with an industry average of 60%.

About AHMSI

Established in April 2008, AHMSI is one of the country's largest residential mortgage loan servicers of Alt-A and non-prime loans. The company is headquartered in Coppell, Texas, and operates as well through locations in Irvine, California; Jacksonville, Florida; and Pune, India.

American Home Mortgage Servicing, Inc.
Christine Sullivan
(949) 790-3600, ext. 35204