PHILADELPHIA — Failed mortgage lender HomeBanc Corp., which filed for Chapter 11 bankruptcy last week, is being threatened with foreclosure by JP Morgan Chase Bank, the lead lender on $68 million worth of operating loans.

Court papers filed Sunday in a Delaware bankruptcy court say JP Morgan Chase, as agent for the syndicate of banks that funded HomeBanc's operations, is demanding assurances it won't get stuck for the money.

JP Morgan Chase wants an emergency hearing Tuesday on its bid for guarantees that Atlanta-based HomeBanc will be able to cover its secured debt.

The bank wants to be able to foreclose on its collateral if no assurances are forthcoming.

HomeBanc said in court papers that it will fight the pressure from JP Morgan Chase, and that it still has a valuable loan-servicing business that continues to generate cash.

Usually, secured lenders don't have to wait long to cash out their holdings in a bankrupt company. Most failing companies try to have deals for Chapter 11 loans and, often, asset sales in hand before they file bankruptcy petitions, to reassure top-ranking creditors.

HomeBanc filed its Chapter 11 petition in Delaware close to midnight Thursday, with little notice to the secured lenders it needs to have on its side, no financing and, so far, only a plan to close the last $2 million of a series of sales to Countrywide Financial Corp.

Troubled companies aren't allowed to use the collateral securing their top loans to fund a controlled Chapter 11 shutdown unless the lenders agree to let them.

JP Morgan Chase says HomeBanc's lenders won't make such an agreement unless they get extra protection for their loans. In court papers filed Sunday, the lead bank says it had "little warning" of HomeBanc's bankruptcy, and the company didn't discuss its bankruptcy-finance plans with lenders until after the filing.

Without Chapter 11 funding or a stand-still agreement with secured lenders, HomeBanc could be thrown into "free fall" liquidation mode, with its assets — including a huge leveraged portfolio of mortgage loans and mortgage-backed securities — up for grabs.

Other recent victims of the mortgage sector meltdown had bankruptcy financing deals in hand when they filed for Chapter 11, as well as sale plans that meant secured lenders would not have to wait long for their cash.

Subprime lender New Century Financial Corp., which collapsed in April, had a short-term $150 million bankruptcy borrowing arrangement in place when it filed for Chapter 11, and buyers were signed up for two major parcels of assets.

Financier Wilbur Ross has offered $50 million in bankruptcy financing to American Home Mortgage Corp., which also plans rapid-fire sales to raise money. American Home, however, will be throwing its assets on the block without a committed opening bid from any potential buyer.

American Home and HomeBanc both targeted higher-rated borrowers than New Century. Unlike New Century, they haven't been accused of flawed accounting. Yet they appear to be having a tougher time inspiring lender or buyer confidence in bankruptcy than New Century, as what was termed a tough market for mortgage-related securities becomes an impossible one.

As of Dec. 31, 2006, HomeBanc's portfolio was valued at $5.7 billion. Since then, the market for such securities has almost seized up, as retreating lenders struggle to dump paper tainted by rising defaults.