HomeBanc Mortgage loan servicing sale procedures approved

By Caroline Salls

Pittsburgh, Sept. 13 - HomeBanc Mortgage Corp. obtained court approval of the bid procedures for the proposed sale of its loan servicing rights, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

HomeBanc said the servicing rights include collection of loan payments, making required advances, accounting for principal and interest, customer service, holding escrow or impound payments for taxes or insurance and contacting delinquent borrowers and supervising foreclosures.

The company said at least one of its loan counterparties has expressed concern about HomeBanc's servicing arrangements in light of its financial condition, so the company decided selling the servicing rights was in the best interest of HomeBanc and its creditors.

No stalking horse bidder has been selected.

If qualified bids are received, the company will select the highest bid before the auction begins.

In addition, the company can elect to name the highest bid at auction as the stalking horse bid, and a second auction would then be held, starting with the stalking horse bid.

Competing bids must be made in increments of at least $500,000. If the second auction is held, the competing bid increment would increase to $750,000.

All bidders must make a deposit of 10% of the proposed purchase price.

The auction will be held Oct. 9, and the sale hearing is scheduled for Oct. 16.

HomeBanc, an Atlanta-based mortgage banking business, filed for bankruptcy on Aug. 9. Its Chapter 11 case number is 07-11079.

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