CUs Scramble to Fund Mortgages After Shutdown of Key Lender

MELVILLE, N.Y. – Dozens of credit unions were searching for new funding sources for mortgages they already have approved after Friday’s closure of American Home Mortgage Corp. The company, which provides mortgages for dozens of credit unions, shut down Friday after its lenders refused to fund as much as $800 million in new mortgages it committed to make through its customer credit unions and banks. At least one credit union customer, Members CU in North Carolina, said the mortgage lender was still trying to fund mortgages it had committed to at three of the credit union’s branches. American Home acquired mortgage offices in more than 50 credit unions when it acquired Irwin Mortgage Corp. last year. The company reported Thursday that it will reduce its work force from more than 7,000 to 750, mostly at its Long Island headquarters, but will maintain its thrift and servicing businesses.