Mortgage Lenders set bid procedures for proposed loan servicing platform sale

By Caroline Salls

Pittsburgh, April 17 - Mortgage Lenders Network USA, Inc. requested court approval of the bid procedures for the proposed sale of its loan servicing platform and related assets, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The assets to be sold include real estate leases and equipment leases; intellectual property, including software licenses; and other personal property used in the loan servicing platform, including office equipment and furniture.

No stalking horse bid has been selected yet, and Mortgage Lenders said the auction could proceed without one.

If the company does decide to select a stalking horse bidder, it must do so by May 16.

If a stalking horse bidder is selected, Mortgage Lenders will pay it a break-up fee of 3% of the purchase price if it is not the high bidder at auction.

The company said the sale must close by June 1. Mortgage Lenders said its loan servicing operations will cease on April 30 and the platform will not be generating any revenue after that, while it may still be accruing administrative expenses.

Bids at auction must be for at least the sum of any stalking horse bid plus the amount of the break-up fee. If no stalking horse bid is selected, Mortgage Lenders will set the starting bid.

The company has requested an April 24 hearing on the bid procedures, a May 17 auction date and a May 23 sale hearing.

Mortgage Lenders Network, a Middletown, Conn.-based lending company, filed for bankruptcy on Feb. 5. Its Chapter 11 case number is 07-10146.

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