American Home Mortgage files for bankruptcy

[sabra]

Source: MSNBC/AP

NEW YORK - American Home Mortgage Corp. filed for bankruptcy protection on Monday, the latest casualty of a mortgage industry that has plunged into distress.

The Melville, N.Y.-based company’s request for Chapter 11 bankruptcy protection — filed in bankruptcy court in Wilmington, Del. — caps a tumultuous 10 days for what was in 2006 the nation’s 10th-biggest home lender.

American Home Mortgage said it fell victim to “extraordinary disruptions” in the markets that support the mortgage industry. A cold housing market and a spike in payment defaults scared investors away from mortgage debt, including bonds and other securities backed by home loans.
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With American Home Mortgage’s home loan portfolio rapidly losing value, its financial backers pulled the plug and the company ran out of cash.

Read more: http://www.msnbc.msn.com/id/20144277/

[Elspeth]

1. The first....

We'll see how many more go under.

[Demeter]

8. Not the First by a Long Shot!

http://www.boston.com/news/local/connecticut/articles/2007/02/05/mortgage_lenders_network_files_for_ch_11_bankruptcy_protection/

Mortgage Lenders Network USA Inc., which caters to borrowers with weak credit, filed for bankruptcy-court protection Monday, the latest in a string of subprime home-loan providers to be hit by slowing home sales and rising delinquencies....


http://www.spokesmanreview.com/sections/Met/

Background: In January 2004, Metropolitan Mortgage declared bankruptcy, taking down with it the fortunes of many investors who placed their trust in the decades-old Spokane company. Follow developments here.(Still pending 3 years later...)

http://www.nytimes.com/2007/04/03/business/03lend.html?ex=1333252800&en=314f9aa5e20d720c&ei=5090&partner=rssuserland&emc=rss

From an 11-story steel-and-glass tower that housed its headquarters in Irvine, Calif., the New Century Financial Corporation ruled as one of the nation’s largest mortgage lenders to individuals with weak, or subprime, credit during the recent housing boom...ended yesterday,(April 2, 2007) when New Century became the biggest, and most prominent, corporate failure in the subprime mortgage business.

And that's without even trying very hard....

[peacebird]

10. but it IS one of the first to go under that wasn't mainly a subprime lender

the initial collapses of financial groups took out the subprime lenders. Now it has spread into lenders who mainly deal in traditional mortgages as well.

Not good.

[Demeter]

12. I Accept the Point

But what makes one a subprime vs prime lender? Whatever was going on at the time. Time has changed, time has caught up with everyone, time will bring down all the American business follies, including Bush/Cheney/Co. If we only have enough of it to survive the collapse...

[TexasLawyer]

14. Yes, American Home borrowers generally had good credit

The recent blowup at American Home Mortgage is a reminder that the mortgage markets are very panicked and illiquid right now. American Home customers generally had good credit histories — an indication that the mortgage mess is no longer confined to risky subprime borrowers. Through the rest of this year and into next, a raft of adjustable-rate mortgages will begin adjusting to higher interest rates. The higher monthly payments may very well squeeze even borrowers with good credit histories, leading to a new round of mortgage defaults.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x1527007

[Malidictus Maximus]

15. If you can't afford it on a fixed

then you can't afford it. Period

[OpenSpace]

2. Good for them.

They have been making too much money off the backs of the poor for too long!

[havocmom]

3. What Neil Bush did for Silverado Savings & Loan, his brother doinfg for the country

Sink anything of value... BFEE marches on.

Where was the US economy back in January of 2001 again?

[onehandle]

4. Welcome to the Bushennium.

A thousand years of progress out of the dark ages down the drain.

[Acadia Blue]

7. Bush is the name and stealing is the game

[cloudbase]

5. They should be held to the same standards

as an individual wishing to declare bankruptcy.

[Acadia Blue]

6. AWWWW so sad. They were so greedy to give loans to people who

would not be able to afford the esponential increase in payments later.

[fed-up]

9. x-post- lots of websites here on crashing market-w/great site w/graphs on subprime loans

excellent website with charts and graphs
http://www.recharts.com/reports/CSHB031207/CSHB031207.html?ref=patrick.net


http://www.usatoday.com/money/economy/housing/2007-08-05-mortgage-lenders_N.htm?csp=1
Mortgage crisis: Home loans are harder to get
EXPERT OPINION: Will mortgage rates rise? fall? | Bankrate.com's full rate trend report
By Noelle Knox, USA TODAY
Updated 28m ago | Comment | Recommend E-mail | Save | Print | Reprints & Permissions |
MORE ON MORTGAGE RATES
Nationwide rates: Chart mortgage rates, see rates in your state and more
CALCULATE: Your mortgage payments under different scenarios | More mortgage calculators
TIPS: Have a stress-free refinancing
AUDIO: Why Interest-only mortgages are risky


http://patrick.net/housing/contrib/medianLiars.html
Reported Prices Rise While Asking Prices Fall, But How?
Newspapers Choose To Ignore Simple Math
By Patrick Killelea
Thursday, May 17, 2007

http://patrick.net/housing/contrib/plummet.html
Mainstream Press Ignores Housing Sales Fall of 11% Compared to April 2006
US April House Sales Plummet, Prices Fall Record Amount
by Patrick Killelea
The census bureau reports that house sales compared to April of 2006 are DOWN 11%, but the press, desperately cheerleading for their real estate advertisers, ignore this fact and instead concentrate on the slight rebound from the truly dismal month of March 2007.


http://patrick.net/housing/crash2.html
US Housing Crash Continues
Who disagrees that house prices will continue to fall?


http://ml-implode.com /
Tracking the housing finance breakdown: a saga of corruption, stupidity, and government complicity.
Imploded - Ailing/Watch - News - Forum - About - Tips - SUED!

[dogfacedboy]

11. I had my suspicions about the mortgage industry when

two years ago I started getting 10-20 pieces of junk mail per week from various companies trying to get me to refinance. They offered all kinds of crazy mortgage plans, as well.
I feel sorry for the folks who got talked into these crazy plans that made it too easy for them to buy a home they really couldn't afford. Now they lose, while the failing mortgage companies will just "re-organize", and will be right back in some other predatory lending business in no time.

I can tell there is a problem with home sales just by looking around my own neighborhood. There are a lot of "For Sale" signs up. Homes that sold for, say, $180,000 in 2001 are going for $150,000 or $160,000 right now. Out on the edge of town, the McMansions that went for $500,000 when they were being built in 2000 are being sold for less than that, with many in foreclosure.

[Fleshdancer]

13. I need help with the big picture

This doesn't sound good but I confess to having little knowledge on the housing market and how it drives the US economy overall. I've heard the housing market referred to as a bubble right now, is that true? If so, will American Home Mortgage going bankrupt drastically affect the housing market at all? Are the top 9 biggest home lenders doing ok? Is it overly simplistic to assume that once the housing market drops, the US economy drops with it right now?

:shrug:

[fed-up]

16. read some of the links in post #9 nt

[Xenotime]

18. It will drop. This economy is doomed to failure.

[OnceUponTimeOnTheNet]

17. Is it this week Bernanke speaks?

Saw that hyper Cramer video on the net. Whoo boy. That was abit wild, even for him.

video here. http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=385&topic_id=45379&mesg_id=45379