Monday, August 6, 2007

American Home Mortgage Files For Bankruptcy

From the WSJ:

American Home Mortgage Investment Corp. became the latest lender to succumb to the subprime turmoil, filing for bankruptcy days after laying off most of its work force and saying it would no longer take loan applications.

The nation's 10th-largest mortgage lender last year, whose focus was customers who didn't need subprime loans but didn't have top-notch credit, made its Chapter 11 filing in U.S. Bankruptcy Court in Wilmington, Del.

Deutsche Bank AG is listed as American Home's largest creditor, followed by Wilmington Trust Corp., JPMorgan Chase & Co. and Countrywide Financial Corp.

The Melville, N.Y., firm said late Thursday most of its work force would be laid off as the company maintains its thrift and servicing businesses as American Home seeks to preserve the value of its remaining assets. Some 6,500 employees were terminated Friday, said American Home in its filing, leaving about 1,000.

This is not exactly the most surprising development in the markets. But it is a sign (notice how I correctly spelled that?) the mortgage market is under tremendous pressure right now. This is the 10th largest lender going bankrupt, not a small two-person operation.

On a non-related note -- thanks to all who caught my previous title typo. I was in the air coming home from O'hare O-hell airport.