The Pine Brook, NJ-based U.S. Mortgage Corp., and its CU National Mortgage subsidiary, announced today that it has filed Chapter 11 Bankruptcy.
And it's blaming a credit union client.
"Although (crisis management firm NachmanHaysBrownstein) had sought to avoid a bankruptcy filing in order to save costs and prevent delay, and was supported in this effort by the vast majority of affected credit unions, a credit union insisted upon advising its members to stop sending payments normally to the company on their mortgages," stated a company release.
The statement continued, saying the credit union's actions, along with other developments, "forced the company to seek bankruptcy protection in order to preserve value for all affected creditors."
The release also acknowledged "irregularities in the company's accounts and recordkeeping", which forced it out of the mortgage origination business.
NHB has formed an unofficial credit union committee advised by Washington, D.C.-based attorney Bruce Jolly of Venable LLP. Neither NHB nor Jolly was available for further comment.
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