American Home Mortgage Investment Corp. said that it has settled a dispute with IndyMac Bancorp Inc. that arose after IndyMac last summer agreed to take over 98 offices and pay American Home $2 million.

In court papers filed Feb. 22 with the U.S. Bankruptcy Court in Wilmington, Del., Melville, N.Y.-based American Home said Pasadena-based IndyMac will continue operating 83 loan offices idled by American Home but walk away from 15 offices. IndyMac agreed to provide a deposit of $1 million in cash to cover potential damages resulting from that move.

IndyMac approached American Home just prior to American Home’s bankruptcy filing and asked to take over the 98 offices which IndyMac has been operating since August.

The quarrel started after American Home said that IndyMac balked at paying the $2 million, saying in court papers that it had “been continuously led down the garden path by IndyMac with suggestions that the closing [was] imminent only to be derailed at the last minute on multiple occasions with new IndyMac demands, requests and roadblocks.”

IndyMac, which denied stalling, said it faced severe financial problems itself having just reported a $509 million loss for the final quarter in 2007 earlier this month. IndyMac’s Chief Executive Michael Perry added that all loan offices are on notice that they risk being shut down if they don’t show a profit.

American Home was once one of the nation’s largest mortgage lenders, with 500 loan offices in 47 states prior to its bankruptcy last summer which forced the company to liquidate its assets and cease loan operations.

Shares in IndyMac dipped 2.2 percent to $7.08 in early trading Tuesday on the New York Stock Exchange.