Philly Lender An Example Of Mortgage Morass

The plight of American Business Financial Services Inc., a leading subprime lender, may be an example of troubles to come. The company announced, "it was abandoning its bid to resume operations under U.S. Bankruptcy Court protection and would lay off its 820 employees."

"The company's demise should bring a speedier resolution for the mostly elderly investors who bought unsecured investment notes from the company through newspaper advertisements. They are now owed $622 million. But note holders are expected to recover only pennies on the dollar."

Not that the firm wasn't influencial. "An inglorious end for a ballyhooed economic-development deal. Mayor Street said at the time that the deal 'reaffirms Philadelphia's status as a vibrant center of business.'" Philly.com