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Special Reports
Branch Development
Amstar Mortgage Leaves Business, Transfers Branches to Money Store
By Brad Finkelstein
Amstar Financial Holdings Inc., the parent of Amstar Mortgage Corp. here, said
it has agreed to relinquish managerial control of the mortgage company's affiliated branches to The Money Store.
As a result, Amstar Mortgage's operations will be discontinued on or about Dec. 15.
In a statement, Amstar Financial said it blamed four factors for its decision: the current mortgage market conditions,
the increased unpaid liability created by former unprofitable branch offices, the cost to defend several mostly
frivolous lawsuits and seemingly stable lenders unable or unwilling to honor contract commitments with Amstar Mortgage.
"This deal will allow all branch offices and branch employees to continue with a strong viable company, as
well as stop any additional liability to Amstar Financial," the statement said.
Amstar Mortgage has 116 branches, was licensed in 31 states and did over $1 billion in loans a year.
Amstar Financial is looking to raise capital for its other businesses, Homes Opportunity LLC and Amstar Guaranty
Agency Inc. If Amstar Financial is successful in its efforts, Homes Opportunity will concentrate on purchasing
bank foreclosures at a deep discount. Amstar Guaranty will pursue providing insurance products.
Both of these companies are in the early stages of development. However Amstar Financial said it would suspend
operations on or about Dec. 15 if it does not obtain adequate funding for these two businesses.
Several days prior to this announcement, Amstar Mortgage laid off most of the staff at its corporate headquarters.
In a statement, the company blamed large lenders that owe Amstar Mortgage substantial amounts of money but are
now in or will need to seek bankruptcy protection.
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