What to do when you lose your 401(k) matchīankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Should you accept an early retirement offer? David Hal Burch, Tamara Burch's husband, was the director of marketing for AFM and responsible for AFM's advertising campaigns.How much should you contribute to your 401(k)? ĪFM's financial difficulties were exacerbated by advertising commitments that exceeded the company's ability to meet. In March 2007, The Wall Street Journal reported many lenders, including HSBC Mortgage Services and Countrywide, were demanding AFM repurchase loans pursuant to repurchase provisions contained in loan purchase agreements. Court documents indicate Countrywide Financial Corporation was also demanding repurchase of some loans it purchased from AFM. commenced litigation against AFM in the Northern District of Illinois based on assigned loans that resulted in early payment defaults, a repurchase event pursuant to the governing loan purchase agreement. In February 2007, HSBC Mortgage Services, Inc. In August 2006, AFM held an auction at its corporate headquarters to sell its assets. Subprime mortgage crisis and bankruptcy Īs with many subprime mortgage lenders, AFM experienced financial difficulties in 2006 due to repurchase demands from investors and diminished funding capacity because of an increase in non-performing loans. Subprime mortgages totaled US$600 billion in 2006, accounting for about one-fifth of the U.S. Alt-A loans are generally prime (i.e., FICO credit scores of 680 or higher) or near-prime (i.e., FICO credit scores from 620 - 679) loans with some form of reduced documentation requirements (e.g., " stated income", "stated assets", "no income verification").Īlthough most home loans do not fall into this category, subprime mortgages proliferated in the early 2000s. Subprime mortgage loans have a much higher rate of default than prime mortgage loans and are priced based on the risk assumed by the lender. Subprime borrowers are generally defined as individuals with limited income or having FICO credit scores below 620 on a scale that ranges from 300 to 850. Subprime mortgage loans are riskier loans in that they are made to borrowers unable to qualify under traditional, more stringent criteria due to a limited or blemished credit history. Tamara Burch (left) and DeeAnn Myers (right) accepting the 2003 Consumers' Choice Award for Business ExcellenceĪt the beginning of 2006, AFM was a leading subprime and Alt-A mortgage correspondent lender and mortgage broker in the United States. Subprime and Alt-A mortgage lending activities The AFM bankruptcy case was assigned Case No. Both the AFM and Burch bankruptcy cases were subsequently converted to "asset" cases by the Bankruptcy Trustee after assets for distribution to unsecured creditors were discovered. On January 30, 2007, AFM and Burch both filed voluntary "no asset" Chapter 7 bankruptcy petitions in the United States Bankruptcy Court for the Northern District of Georgia. Louis, Missouri-based American Equity Mortgage, Inc., a leading subprime mortgage lender. Prior to co-founding AFM, both Burch and Myers were loan originators with St. The CEO of AFM was Tamara Burch and the COO was DeeAnn Myers. and mortgage-finance company Countrywide Financial Corporation. As a correspondent lender, AFM sold the mortgage loans on the open market to larger investors.Īccording to an article in The Wall Street Journal, AFM originated loans for a fee, then sold them to investors such as HSBC Mortgage Services, Inc. AFM also operated a wholesale mortgage lending division that originated loans via approved mortgage brokers and which used the fictitious name AFMI Funding. AFM conducted business as a multi-state direct-to- consumer correspondent lender and mortgage broker specializing in the origination of subprime and Alt-A mortgage loans. (AFM) was a private S Corporation incorporated on February 2, 2001, according to the Georgia Secretary of State, and headquartered in Marietta, Georgia. Myers, co-founder, Vice-President and COOĪmerican Freedom Mortgage, Inc.
Burch, co-founder, President and CEOĭeeAnn R.
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