American Home Mortgage Shuts Down

[TJ_98370]

[rose-colored-coolaid]

[faster]

[Dan C.]

I have a friend who is the manager for Accredited Home Lenders (LEND) in Seattle/Bellevue. They are having a large team meeting at a hotel in Bellevue all day today. He is very concerned that they will be announcing the closure of Accredited before it hits the paper on Monday. He also said the hedge fund that offered to purchase them may not be following through, contrary to what the press says.

I would short the hell out of an already depressed LEND today if you have some extra pocket cash. You heard it here first!

[biliruben]

Alright! Insider trading!

This blog's really starting to heat up.

disclosure: I've been short a couple lenders for almost a year, but not LEND.

[Dan C.]

Its not insider trading if I tell everybody.

I don't have any money anyway, or I would have shorted the entire mortgage industry six months ago!

[biliruben]

Yeah - I was just joking.

When the company itself says something like they aren't sure if they will continue to to be a "going concern", insider info is pretty unnecessary.

[TJ_98370]

..


....Last week, the company said it was cutting most of its 7,000 workers and would no longer accept mortgage applications, although it is maintaining its thrift and servicing businesses. American Home Mortgage had been facing margin calls from its own lenders following the recent shakeup in the mortgage markets.

The trouble started in subprime mortgages, which are designed for home buyers with shakier credit histories, but has spread into other credit markets. Delinquencies have surged after the housing bust, which has strained lenders who wrote the loans.

American Home Mortgage specialized in so-called Alt-A mortgages, which are offered to more creditworthy borrowers than subprime loans, but they often have adjustable rates and sometimes require little or no documentation.

The company said it filed for bankruptcy "after carefully assessing the sudden adverse impact on the company's liquidity and business from the extraordinary disruptions now occurring in the secondary mortgage and real estate markets....
..