Of course everyone has heard of the mortgage fiasco as of late, but it has spread out of the sub-prime market and into the Alt-A area.  American Home Mortgage is NOT a sub-prime lender.  Its shares have fallen over 90% and it looks as if it will closing its doors in the very near future.  They did not fund hundreds of millions in loans on Monday and Tuesday and announced yesterday that it no longer has the assets to fund any more loans.

What this means for you realtors out there is to stay in contact with your mortgage broker.  If you have any closings in your pipeline, check to see if they were using American Home for the funding.  If so, your deal is in jeopardy!!  There are hundreds of families across the nation that were expecting to close on their homes this week and now will have to scramble to find new financing. 

What this proves is that the mortgage nightmare is truly much worse than anyone expected.  I didn't worry too much about the sub-prime places going out, I never had too many of those deals anyway.  But I did use American Home all the time.  I mean, they were the 10th largest mortgage lender in the country at one point with shares trading at about $36 per share as recently as 6 months ago.  The stock closed yesterday at $1.48 per share.  YIKES!  Talk about scary!

For more on the story, check out Mortgage News Daily, CNN Money, and Forbes