Update: Amstar Says it Will Unload Branches to The Money Store

Amstar put out a press statement updating its earlier-announced plans to close its mortgage operations, saying it will “relinquish managerial control” of its affiliated branches to The Money Store:

Amstar Mortgage Corporation has agreed in principal [sic] to relinquish managerial control of the affiliated branches to The Money Store. These branches and employees will then be offered employment by The Money Store. Amstar Mortgage’s operations will then be discontinued on or about December 15, 2007. Amstar Mortgage Corporation expects to honor its lender commitments until this date.

This decision was based primarily upon four factors: 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 AFLH.

Terms of the deal were not disclosed, and the press release even makes it sound as if Amstar is merely walking away from its 116 branches.

The involvement of The Money Store here is interesting as well — the company had agreed at one point to acquire the majority of the wholesale operations of now-defunct Central Pacific Mortgage in February, before it backed out of the deal three weeks later — a move that many industry insiders said sealed Central Pacific’s fate.

Given the track record here, I’ll believe that The Money Store is taking over Amstar’s branches when it actually happens.