American Residential Enters Arbitration Agreement With Long Beach Mortgage Company

Business Wire, Jan 30, 2002

Business Editors

DEL MAR, Calif.--(BUSINESS WIRE)--Jan. 30, 2002

American Residential Investment Trust, Inc. (NYSE: INV) announced that it has entered into an arbitration agreement with Long Beach Mortgage Company ("LBMC"). On January 4, 2001, the Company had filed a lawsuit, seeking to recover damages arising from its purchase of a pool of residential mortgages from Lehman Capital, a Division of Lehman Brothers Holdings, Inc. in late 1997 and early 1998. The lawsuit had also named Long Beach Mortgage Company, Inc. as a defendant.

The agreement provides that the Company and LBMC will arbitrate the claims held by American Residential Investment Trust, Inc., American Residential Eagle, Inc. and American Residential Eagle Bond Trust 1998-1 against LBMC. It is alleged that LBMC breached its representations and warranties under the loans sold to the plaintiffs between December 1997 and March 1998.

The arbitration is scheduled to start in late February and is expected to take up to three weeks. If the arbitrator determines that any loans purchased violated LBMC's representations and warranties, LBMC will repurchase the loans pursuant to the terms of the agreements between the parties, or if the loans have already been disposed of through the foreclosure process, LBMC will reimburse the Company for all interest and principal losses incurred.

John M. Robbins, Jr., Chairman and Chief Executive Officer of American Residential, said, "Entering arbitration with Long Beach Mortgage Company is a favorable development. We are optimistic that a resolution to our claims will be reached shortly."

In connection with the settlement agreement, LBMC has assumed the obligations of Lehman Capital to repurchase loans from American Residential Investment Trust, Inc. due to LBMC's violation of its representations and warranties. In turn, Lehman Capital has been released from its obligations to repurchase loans based upon a breach of LBMC's representations and warranties.

While Lehman Capital has been released by the Company from claims associated with loan repurchase obligations, litigation is continuing against Lehman Capital relative to various causes of action, including negligent misrepresentation and fraud/false promise. The Companies' lawsuit against Lehman Capital is scheduled for jury trial in Superior Court of California, County of San Diego in April 2002.

About American Residential Investment Trust

American Residential Investment Trust, Inc. is a real estate investment trust (REIT) that has traditionally invested in subprime residential mortgage assets. For more information on American Residential, please visit the Company's web site at www.amerreit.com.

Certain matters discussed in this press release may constitute forward-looking statements within the meaning of federal securities laws. Forward-looking statements include statements regarding dates for arbitration and trial, the duration of arbitration proceedings and the potential to recover a portion of losses through repurchase or reimbursement from LBMC. Actual results and the timing of certain events could differ materially from those projected in or contemplated by these forward-looking statements due to a number of factors, including but not limited to: arbitration and trial scheduling; general economic conditions; the ability of LBMC to repurchase loans or reimburse the Company and other risk factors outlined in American Residential Investment Trust's SEC reports.