Tuesday, March 13, 2007

Another Subprime Lender In Trouble

From the Street.com

Accredited Home Lenders (LEND - Cramer's Take - Stockpickr - Rating) is facing a liquidity crisis that analysts say could leave it following in the footsteps of New Century (NEW - Cramer's Take - Stockpickr - Rating).

Accredited, a San Diego-based mortgage company, said early Tuesday it is exploring various strategic options, including raising additional capital, as much of its cash has been used up by margin calls and forced loan repurchases. Shares plunged 62%, dropping $7.06 to $4.34.

Accredited said it has met $190 million in margin calls this year, most of them in the last month. The company said it is seeking waivers on its credit lines and cutting costs through moves including layoffs.

"We believe that the downturn in the subprime market, and the likelihood that it will persist, sharply raises the liquidity risk," said Keefe Brutette & Woods analyst Bose George in a research note Tuesday morning.

Just what the market needed -- another subprime lender with problems. Let the heads roll - again.