Mortgage lender Alliance Bancorp files Chapter 7
NEW YORK (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. Alliance said it ceased operations the same day.
Once known as United Financial Mortgage Corp., Alliance joined at least a half dozen other U.S. mortgage lenders to seek bankruptcy protection since December. The sector has struggled with rising borrowing costs, stagnating home prices, and soaring delinquencies and defaults.
Alliance differed from most struggling lenders in that it specialized in "Alt-A" home loans, rather than "subprime" loans that have caused the greatest problems.
Alt-A loans, short for "Alternative-A," often go to borrowers who cannot provide full documentation of income or assets. They 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."
Other mortgage lenders to seek bankruptcy protection include New Century Financial Corp. NEWCQ.PK, Mortgage Lenders Network USA Inc., Ownit Mortgage Solutions LLC, People's Choice Financial Corp., ResMae Mortgage Corp. and SouthStar Funding LLC.
(Reporting by Jonathan Stempel)
