Alliance Bancorp seeks bankruptcy protection

NEW YORK, July 16 (Reuters) - Alliance Bancorp Inc. has filed for Chapter 7 bankruptcy protection and will liquidate, becoming the latest residential mortgage lender to collapse in the U.S. housing downturn.

The company, which has offices in Brisbane, California and Oak Brook, Illinois, listed more than $100 million each of assets and liabilities in its bankruptcy petition, filed on Friday with the U.S. bankruptcy court in Wilmington, Delaware.

Formerly known as United Financial Mortgage Corp., Alliance said it specialized in "Alt-A" home loans. Short for "Alternative-A," these often go to borrowers who cannot provide full documentation of income or assets, and are considered to fall between "prime" and "subprime" in quality.

In a letter posted on Alliance's Web site, Chief Executive Lisa Duehring said "the latest market was more than we were able to overcome. We have exhausted our resources." She said the company ceased operations on July 13.

Dozens of mortgage lenders have sold themselves or ended operations in the last year as borrowing costs rose, home prices stagnated, and delinquencies and defaults soared. Several subprime specialists, including New Century Financial Corp. NEWCQ.PK, have sought bankruptcy protection.

To view additional stories about the subprime lending crisis, click on [ID:nN16195443] (Reporting by Jonathan Stempel)