No, you are not being sued.  This is not a lawsuit against you.  Instead, you may be a qualified class member in class action litigation settlement involving American Home common and preferred stock purchases during the Class Period.

American Home was a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by the Company’s subsidiaries.

Beginning on July 31, 2007, class action complaints alleging violations of the federal securities laws on behalf of purchasers of American Home common and/or preferred stock were filed against the Defendants in the United States District Court for the Eastern District of New York.  These actions were consolidated pursuant to a March 19, 2008 Order of the Court and are referred to in the Notice as the “Action.”  On October 3, 2008, a related case pending in the United States District Court for the Eastern District of Virginia was transferred into the United States District Court for the Eastern District of New York and consolidated with the Action, and the case is now known as In re American Home Mortgage Securities Litigation, No. 07-MD-1898 (TCP).  The Judge presiding over this case is the Honorable Thomas C. Platt, United States District Judge.

On August 5, 2009, the Court entered an Order Preliminarily Approving Settlements which preliminarily approved the Settlements, authorized this Notice to be sent to potential Class Members (including Offerings Subclass Members).  Subsequently, the Court scheduled the Settlement Hearing to consider whether to grant final approval to the Settlements.

The persons or entities that are suing are called plaintiffs, and those who are being sued are called defendants. In this case, the plaintiffs are referred to as Lead Plaintiffs, on behalf of themselves and the Class.  Defendants are the Individual Defendants, the Underwriter Defendants and Deloitte.

Defendants deny any wrongdoing.  The proposed Settlements are neither an admission of wrongdoing nor an acknowledgement that any law was violated.  Instead, the parties entered into this settlement agreement to avoid further expense, inconvenience, and uncertainty associated with a court trial.

The detailed terms of the Proposed Settlement are contained in the Notice.

Pursuant to the respective Settlements, the Individual Defendants’ Insurers have agreed to pay the Settlement Amount of $24 million; Deloitte has agreed to pay the Settlement Amount of $4.75 million; and the Underwriter Defendants have agreed to pay the Settlement Amount of $8.5 million to resolve the claims asserted against them.  If approved by the Court, settlement funds will distributed according to the terms described in the Notice, beginning in paragraph 26.

At this time, it is not possible to make any determination as to how much Class Member or an Offerings Subclass Member may receive from the Settlements.

To be eligible for any payment, your timely, complete, and documented Proof of Claim form must be postmarked on or before March 1, 2010. All forms postmarked after this date will be late and may be denied.

To aid in the submission of your Claim, you may create a Proof of Claim form to be mailed in by accessing the Online Claims Processing feature.

You may be a Class Member if:

1. If you purchased or otherwise acquired American Home common and/or preferred stock between July 19, 2005 and August 6, 2007, inclusive; also,
2. You purchased or otherwise acquired shares of American Home common stock pursuant or traceable to the registration statements issued in connection with secondary offerings conducted on or about August 9, 2005 and on or about April 30, 2007 through and including August 6, 2007 (the “Offerings Subclass”); and,
3. You were damaged thereby (in other words, your stocks incurred losses); and,
4. You are not excluded by the definition of the Class and you do not elect to exclude yourself from the Class.

If and only if all these terms apply, then you are a class member and will be bound by the proposed applicable Settlements if the Court approves them, and by any judgments or determination of the Court affecting the Class and the Subclass, as applicable.

Only Class Members are eligible to participate in the distribution of the Net Settlement Fund created by the Individual Defendants Settlement and only Offerings Subclass Members are eligible to participate in the distribution of the Net Settlement Funds created by the Settlements with Deloitte and the Underwriter Defendants.

If you are a Class Member (including Offerings Subclass Members), you will be required to submit a Claim Form and supporting documentation to establish your entitlement to share in the respective Net Settlement Funds.  A Claim Form is included with this Notice, or you may go to the website maintained by the Claims Administrator for the Settlements or request that a Claim Form be mailed to you.  The website is www.amhomemortgagesecuritieslitigation.com.  The Claim Form can also be downloaded from Lead Counsel’s respective websites at, www.blbglaw.com and www.bermandevalerio.com.  Those who exclude themselves from the Class and those who do not submit timely and valid Claim Forms with adequate supporting documentation will not be entitled to share in the Net Settlement Funds.  Please retain all records of your ownership of and transactions in American Home common stock and preferred stock, as they may be needed to document your Claim.

According to the terms of the settlement, you have four options:

First, you may submit a claim.  This is the only way to get a payment. If you wish to obtain a payment as a Class Member, you will need to file a Proof of Claim form with the Claims Administrator postmarked no later than March 1, 2010.  You may download a Proof of Claim form from this website, or you may create a Proof of Claim form using the Online Claims Processing feature.  Both options require to you submit the completed Proof of Claim form along with supporting documentation to the Claims Administrator no later than March 1, 2010.

Second, you may exclude yourself from the settlement.  To exclude yourself from the settlement, you must send a letter to the Claims Administrator, received no later than December 23, 2009, and following the instructions listed in paragraph 64 of the Notice. If you exclude yourself from the Class, you will not be eligible to receive any benefit from the Settlement and you should not submit a Proof of Claim form but you will retain the right to be a part of any other lawsuit, however you will receive no payment or other benefit from this litigation.

Third, you may object to the settlement.  To object to any part of the settlement, you must send a signed letter stating that you object to the proposed settlement.  A copy of the objection letter must be received by the Court and all parties listed in paragraph 69 of the Notice no later than December 23, 2009.

Finally, you may do nothing.  If you do nothing you will still be bound by the terms of the settlement, but will not receive payment from the Settlement Fund.

To be eligible for any payment, your timely, complete, and documented Proof of Claim form must be mailed to the Claims Administrator postmarked on or before March 1, 2010. All forms postmarked after this date will be late and the claim may be denied.

Additionally, you may create your claim information by accessing the Online Claims Processing feature, and submitted with supporting documentation postmarked on or before March 1, 2010.

Yes—as a Class Member you are represented by Lead Plaintiffs (and as an Offerings Subclass Member by the Offerings Subclass Plaintiffs) and the law firms of Bernstein Litowitz Berger & Grossman LLP, and, Berman Devalerio, collectively known as “Lead Counsel."

Lead Counsel will represent your interests unless you enter an appearance through counsel of your own choice at your own expense.  You are not required to retain your own counsel, but if you choose to do so, such counsel must file a notice of appearance with the Court and serve it on Lead Counsel and the applicable Settling Defendants’ Counsel so that the notice is received on or before December 23, 2009.

Any questions for Lead Counsel should be directed to either/or:

You do not need to retain a lawyer because Lead Counsel represents the interests all class members.  However, you may retain your own lawyer, but must do so at your own expense.

At the Settlement Hearing, the Court will determine whether the Settlement and Plan of Allocation should be approved as fair, reasonable, and adequate.  You are not required to attend the Settlement Hearing.  Lead Counsel will attend and present on behalf of all potential Class Members.

The Court will also consider whether the Lead Counsel’s motion for attorneys’ fees and litigation expenses should be approved, and, whether the litigation should be dismissed and the claims released.

The Settlement Hearing will be held on January 13, 2010 at 1:30 p.m. before the Honorable Thomas C. Platt, at the United States District Court for the Eastern District of New York, Long Island Courthouse, Courtroom 1040, Central Islip, New York, NY 11722.  The Court reserves the right to approve the Settlements at or after the Settlement Hearing without further notice to the members of the Class (including the Offerings Subclass).

You have the right to exclude yourself—otherwise known as “opting-out”—from the Settlement.  By excluding yourself, you will receive no payment or other benefit, if any, from this litigation, but retain the right to file a separate lawsuit at your own expense.

To be valid, your completed request for exclusion must be received by the Claims Administrator on or before December 23, 2009.  Requests for exclusion must comply with all instructions beginning on paragraph 64 of the Notice.

To object to approval of any of the Settlements, the proposed Plan of Allocation or Lead Counsel’s request for an award of attorneys’ fees and reimbursement of expenses, you must remain a class member (e.g., you cannot exclude yourself form the litigation) and submit written notice of objection to the Court.  Your objection must follow all of the requirements beginning on paragraph 69 of the Notice.

Your complete objection submission, including all documents and briefs you wish considered in support of your objection, must be received by each of the parties listed below no later than December 23, 2009:

First review all documents provided in the Case Documents section. If questions remain unanswered, please contact the Claims Administrator through American Home Litigation Settlement toll-free hotline at 1-877-265-3429.

All legal questions should be directed to Lead Counsel.