Exhibit 10.40

                              EMPLOYMENT AGREEMENT

            This Employment Agreement, dated as of March 6, 2002 (this
"Agreement"), is by and between American Home Mortgage Holdings, Inc., a
Delaware corporation having a place of business at 520 Broadhollow Road,
Melville, NY (the "Company"), and Stephen Hozie, 40 Mallet Hill Road, Columbia,
SC (the "Executive").

            Whereas the Company wishes to assure itself of the services of the
Executive, and the Executive desires to be employed by the Company, upon the
terms and conditions hereinafter set forth.

            Now, Therefore, the Company and the Executive hereby agree as
follows:

            1. Employment. The Company agrees to employ the Executive, and the
Executive hereby accepts such employment by the Company during the term set
forth in Section 2 and on the other terms and conditions of this Agreement.

            2. Term. The term of this Agreement shall commence on March 25,
2002, and shall continue until four weeks after the resignation or discharge of
the Executive.

            3. Position, Duties and Responsibilities, Rights.

            (a) During the term of this Agreement, the Executive shall serve as,
and be elected to and hold the office and title of Chief Financial Officer of
the Company. As such, the Executive shall report only to the Chief Executive
Officer of the Company (the "CEO") and the Board of Directors of the Company,
and shall have all of the powers and duties usually incident to the office of
Chief Financial Officer of the Company. In addition, the Executive shall serve
as the Chief Financial Officer of subsidiaries of the Company if and when
requested to do so by the CEO.

            (b) During the term of this Agreement, the Executive agrees to
devote substantially all the Executive's time, efforts and skills to the affairs
of the Company during the Company's normal business hours, except for vacations,
illness and incapacity, but nothing in this Agreement shall preclude the
Executive from devoting reasonable periods to (i) manage the Executive's
personal investments, (ii) participate in professional, educational, public
interest, charitable, civic or community activities, including activities
sponsored by trade organizations, and (iii) serve as a director or member of an
advisory committee of any corporation not in competition with the Company or any
of its subsidiaries, or as an officer, trustee or director of any charitable,
educational, philanthropic, civic, social or industry organizations, or as a
speaker or arbitrator; provided, however, that the performance of the
Executive's duties or responsibilities in any of such capacities does not
materially interfere with the regular performance of the Executive's duties and
responsibilities hereunder.

            4. Place of Performance. In connection with the Executive's
employment by the Company, the Executive shall be based at its principal
executive offices which are currently located in Melville, NY, and shall not be
required to be absent therefrom on travel status or
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otherwise for more than a reasonable time each year as necessary or appropriate
for the performance of the Executive's duties hereunder.

            5. Compensation.

            (a) During the term of this Agreement, the Company shall pay the
Executive, and the Executive agrees to accept a base salary at the rate of not
less than $ 225,000.00 per year (the annual base salary as increased from time
to time during the term of this Agreement being hereinafter referred to as the
"Base Salary"). The Base Salary shall be paid in installments no less frequently
than monthly. Any increase in Base Salary or other compensation shall not limit
or reduce any other obligation of the Company hereunder, and once established at
an increased specified rate, the Executive's Base Salary hereunder shall not
thereafter be reduced.

            (b) During the term of this Agreement, the Company shall, after the
close of each calendar year, pay the Executive an objective achievement bonus,
the amount of which will be determined by the CEO. To determine the amount of
the objective achievement bonus for a given year, the CEO will consider whether
the Executive achieved the objectives Set forth in the Executive's business plan
for that calendar year. If the CEO determines that all of the objectives were
achieved, the CEO will award the Executive an objective achievement bonus of not
less than $50,000.00 (not less than $75,000 for the year ending December 31,
2002). If some, but not all of the objectives were achieved, the CEO will award
a lesser objective achievement bonus. Objective achievement bonuses for a given
year will be paid no later than the last day of February of the succeeding year.

            (c) Commencing for the year beginning January 1, 2003, and for each
subsequent year during the term of this agreement, the Company shall pay the
Executive, a management evaluation bonus the amount of which will be determined
by the CEO. The amount of the management evaluation bonus will be targeted at
$50,000, but may be a greater or lesser amount. The CEO will determine the
actual amount of the management evaluation bonus for a given year based on the
CEO's evaluation of the Executive's overall performance during the year.
Management evaluation bonuses for a given year will be paid no later than the
last day of February of the succeeding year.

            (d) Commencing for the year beginning January 1, 2003, and for each
subsequent year during the term of this agreement, the Company shall, after the
close of each calendar year, pay the Executive a company performance award the
amount of which will be determined by the CEO. To determine the amount of the
company performance award for a given year, the CEO will consider whether the
company achieved the objectives set forth in the Company's business plan for
that calendar year. If the CEO determines that all of the objectives were
achieved, the CEO will award the Executive an company performance bonus of not
less than $50,000. If some, but not all of the objectives were achieved, the CEO
will award a lesser company performance bonus. Company performance bonuses for a
given year will be paid no later than the last day of February of the succeeding
year.

            (e) For the period from March 25, 2002 through December 31, 2002,
the Company shall pay the Executive a guaranteed bonus of $75,000. One half of
the guaranteed bonus shall be paid to the Executive on the next Company pay date
following the Executive

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commencing employment at the Company. The other half of the guaranteed bonus
shall be paid no later than February 28, 2003.

            (f) The Executive will not be entitled to any unpaid bonuses if this
Agreement is terminated. If the Executive resigns or is terminated for gross
misconduct prior to February 28, 2003, the Executive will promptly repay the
Company that half of the guaranteed bonus paid to the Executive shortly after
the Executive commenced employment at the Company.

            (g) During the term of this Agreement, the Executive shall be
entitled to fringe benefits, in each case at least equal to and on the same
terms and conditions as those attached to the Executive's office on the date
hereof, as the same may be improved from time to time during the term of this
Agreement, as well as to reimbursement, upon proper accounting, of all
reasonable expenses and disbursements incurred by the Executive in the course of
the Executive's duties. The Executive will be provided the specific benefits and
relocation plan set forth on the addendums attached hereto. The Executive agrees
to reimburse the Company for amounts it paid to relocate the Executive if the
Executive resigns or is terminated for gross misconduct within one year of the
Executive commencing employment hereunder.

            (h) The Executive will be eligible to participate in the Company's
stock option plan. Upon the Executive commencing employment hereunder, the
Executive shall receive an option award for 15,000 shares of the existing class
of the common stock of the Company. One-half of the award (7,500 shares) shall
vest and be exercisable two years following the date the Executive commences
employment hereunder. The remainder of the award (7,500 shares) shall vest and
be exercisable three years following the date the Executive commences employment
hereunder. The complete terms of the option award will be governed by the
Company's omnibus stock option plan.

            6. Termination of Employment. The employment created hereby is at
will. The Company may terminate this Agreement by discharging the Executive. The
Executive may terminate this Agreement by resigning. Discharge or resignation
may be for any reason or for no reason. If the company chooses to discharge the
Executive, it will deliver a letter of discharge pursuant to the notice
provisions of section 10. If the Executive chooses to resign, the Executive will
deliver a letter of resignation pursuant to the notice provisions of section 10.

            7. Change of Control. Not withstanding anything to the contrary
herein, if any person or entity acquires more than 50% of the voting stock of
the Company during the first year of the Executive's employment hereunder, the
Company will notify the Executive pursuant to the provisions of Section 10
hereof that a new majority owner exists. In such case, the Executive will have
sixty days to elect to terminate this Agreement due to the change of control by
resigning pursuant to Section 6 hereof. If the Executive so elects, within the
prescribed timeframe, the Company will pay the Executive severance of $375,000.
This section 7 shall survive the termination of this Agreement.

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            8. Entire Agreement: Amendment.

            (a) This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all other
agreements between the parties with respect to the subject matter hereof.

            (b) Any amendment of this Agreement shall not be binding unless in
writing and signed by both (i) the CEO and (ii) the Executive.

            9. Enforceability. In the event that any provision of this Agreement
is determined to be invalid or unenforceable, the remaining terms and conditions
of this Agreement shall be unaffected and shall remain in full force and effect,
and any such determination of invalidity or enforceability shall not affect the
validity or enforceability of any other provision of this Agreement.

            10. Notices. All notices which may be necessary or proper for either
the Company or the Executive to give to the other shall be in writing and shall
be sent by hand delivery, registered or certified mail, return receipt requested
or overnight courier, if to the Executive, to him at 40 Mallet Hill Road,
Columbia, SC 29225 and, if to the Company, to it at its principal executive
offices at 520 Broadhollow Road, Melville, NY 11747, Attention: Human Resources
Officer, with a copy to Cadwalader, Wickersham & Taft, 100 Maiden Lane, New
York, New York 10038, Attention: Louis Bevilacqua, Esq., and shall be deemed
given when sent. Either party may by like notice to the other party change the
address at which it is to receive notices hereunder.

            11. Non-Disparagement, Non-Solicitation, Confidential Information.
The Company and the Executive agree that neither will disparage the other and
that their representatives will not disparage either party hereto. The Executive
agrees that for a period of six months following the termination of this
Agreement, the Executive will not solicit any employee of the Company to leave
the Company or hire any employee of the Company. The Company and the Executive
agree to keep the terms of this Agreement confidential except that the Executive
may divulge the terms of this Agreement to the Executive's spouse, attorney,
financial advisor and accountant provided they agree to keep the terms of this
Agreement confidential. The Executive agrees to protect, not disclose, and not
use for the Executive's benefit any confidential information or trade secrets
belonging to the Company, including information regarding proprietary procedures
and techniques, accounts, or personnel (excepting information that was already
disclosed by the Company or otherwise was made public other than by breach of
this Agreement by the Executive). The preceding two sentences shall not apply to
disclosures required due to the laws or regulations of governments, or the
orders of courts having jurisdiction over the Company and the Executive. This
section 11 shall survive the termination of this Agreement.

            12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE
ENFORCEABLE IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

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            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.


                                       American Home Mortgage Holdings, Inc.




                                       By: /s/ Michael Strauss
                                           -----------------------------------
                                           Name:  Michael Strauss
                                           Title: President and CEO



                                           /s/ Stephen Hozie
                                           -----------------------------------
                                           Stephen Hozie

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         ADDENDUM ONE TO THE EMPLOYMENT AGREEMENT BETWEEN AMERICAN HOME
             MORTGAGE HOLDINGS AND STEPHEN HOZIE DATED MARCH 5, 2002


                     AMERICAN HOME MORTGAGE BENEFITS PACKAGE

                                     HEALTH

OXFORD HEALTH PLAN (FREEDOM), PROVIDER IS SUBJECT TO CHANGE Eligible 30 days
from day of hire

                            EMPLOYEE COST PER MONTH:

                          Single:       Free
                          With Spouse:  $278.46
                          With Child:   $202.56
                          Family:       $465.64

______________________________________________________________________________

                                     DENTAL

DELTA DENTAL - DMO, PROVIDER IS SUBJECT TO CHANGE Eligible 30 days from day of
hire

                            EMPLOYEE COST PER MONTH:

                          Single:       $16.53
                          Family:       $38.62

                               DELTA DENTAL - PPO

                          Single:       $23.80
                          E&S:          $42.00
                          Family:       $62.30
______________________________________________________________________________

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______________________________________________________________________________
401(K) - MERRILL LYNCH, PROVIDER IS SUBJECT TO CHANGE


Employee contribution 1-15%

No employer match Eligible 90 days from day of hire

Quarterly enrollments:  Jan -- April -- July -- Oct

______________________________________________________________________________

Voluntary LIFE/LTD Insurance


                                  EMPLOYEE PAID

Eligible first of the month following 30 day waiting period.

______________________________________________________________________________

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        ADDENDUM TWO TO THE EMPLOYMENT AGREEMENT BETWEEN AMERICAN HOME
            MORTGAGE HOLDINGS AND STEPHEN HOZIE DATED MARCH 5,2002


                           EMPLOYEE RELOCATION PROGRAM

The following represents American Home Mortgage's Relocation Program. You will
be eligible for expense reimbursement based on the criteria specified below:

      o     Real estate broker's commissions up to a maximum of the lesser of 6%
            or $20,000.

      o     No fee points/Reduced interest rate mortgage. Fees will be waived
            except that you are responsible for customary third party fees.

      o     We will cover temporary housing expenses for a period not to exceed
            90 days while you transition to permanent housing. We will assist
            also you in securing temporary housing in the area.

      o     You are responsible for securing a household moving vendor. American
            Home Mortgage will cover the cost of this move up to a maximum of
            $15,000.

      o     American Home will reimburse travel expenses associated with
            returning to your home three times per month so long as travel is on
            a "Super Saver" fare ticket. Travel reimbursement will be paid for
            up to 90 days.

______________________________________________________________________________

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