Aaaaaaaand a Prime Lender Gets Ready to Go Down

by Alex Stenback on July 31, 2007

We’ve mostly refrained from chronicling the ongoing mortgage lender implosion around here.  Mainly because it has been so ably covered by others like Calculated Risk (who points out the unseemly nature of this particular lender’s meltdown) and the ubiquitous Implode-o-Meter.

But this latest news on American Home Mortgage is worth mentioning, because they are not a sub-prime lender.  This is a mostly Prime & Alt-A lender and a NYSE listed (for now) outfit with five branches and some 32 loan officers plus support staff right here in the Twin Cities, and all indications are they are going down (barring any 11th hour buyout by another lender.)  Seeking Alpha Summarizes the situation thusly:

At the moment the company is “evaluating how the weak
mortgage market will affect it”, which probably means recalculating the
value of its mortgages and related securities, and deciding whether to
have a fire sale or exercise the Bankruptcy option.

As the
story unfolds, people may try to paint this as part of the subprime
mortgage mess. But don’t be fooled – AHM only dealt in prime and near
prime mortgages.

We have a mortgage problem in the US, not a subprime problem. It’s a mortgage problem which is only going to get worse.

Might be time to start revising our graphic from earlier this week.
· American Home Mortgage: Continued Carnage [Seeking Alpha]
· American Home Mortgage Tumbles on Liquidity Issues [Washpost]

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