American Home Files for Bankruptcy After Shutdown(bloomberg)

[katty]

more: http://www.bloomberg.com/apps/news?pid=20670001&refer=worldwide&sid=a_QKE0aNfYbE

American Home Files for Bankruptcy After Shutdown (Update2)

By Steven Church and Bradley Keoun


The offices of American Home Mortgage Corp. in New York Aug. 6 (Bloomberg) -- American Home Mortgage Investment Corp. became the second-biggest residential lender to file for bankruptcy protection this year, adding to signs that late payments have spread to homeowners with good credit records.

The company sought federal court protection from creditors in Wilmington, Delaware, today, saying it had assets of more than $100 million and debts of more than $100 million owed to more than 100,000 creditors. The filing comes after the company announced Aug. 2 it would halt operations and slash staff.

American Home specialized in mortgages for people who fall just short of top credit scores. More than half a dozen competitors have declared bankruptcy this year as defaults spilled over from ``subprime'' borrowers with the worst repayment records to those with more reliable payment histories.

``Their sources of funding have all dried up,'' said Mark T. Power, an attorney who is representing some creditors in the case. ``This case is going to be very similar to New Century.''

[TomInTib]

1. One has to wonder who is going to survive this.

This thing is turning into an avalanche.

[katty]

2. yeah, and this is just the beginning of the freefall

[cliss]

3. Here we go -

This is like waching a train wreck in slow motion. Or a domino effect. We just saw the first dominoes fall. Now watch the rest fall, one after another.

The people who will be most hammered are the ones who have a lot of debt; like consumer debt + home equity loans up to the hilt. Expenses are creeping up, ever so slowly and the gavel is about to fall.