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

 

4 Comments on American Home Mortgage in trouble....

AUG
02
2007
Hit Router
scary scary stuff.  they had something like 800 million in loans that did not fund in two days.  whoa.
1:08pm • #1

My deal was set to fund on Tuesday right in the middle of all this and of course it did not go.  It's a big scramble to get a new loan approved and to docs quick but I did it in 6 hours and hopefully funding today.  My borrowers will only be homeless for 2 days which is better than a week. 

Glad to see you were warning agents because seriously, other Alt A banks will be SLAMMED this next week trying to accomodate that 800 million in loans that now has to get done somewhere else and by someone else!
1:39pm • #2
Hit Router
I have a lot of loan with American Home.  Scary stuff.
1:44pm • #3

It's official.  Newsday is reporting that AHM is closing it's doors on Friday. 

 

"Just after 3 p.m., company founder Michael Strauss sent an email to employees saying, "American Home Mortgage has been forced to close." It said tomorrow would be their final day of employment."

Here is a link to the fill story ...
4:00pm • #4


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