American Home Mortgage Investment Corp., a Melville, New York-based prime mortgage REIT, today updated shareholders on its liquidity woes and said it’s considering strategic options including ‘the orderly liquidation of its assets.’
American Home Mortgage Investment Corp. today reported that it is working diligently to determine how best to resolve the liquidity issues that have recently developed with respect to its business. These issues are primarily the result of the unprecedented disruption now occurring generally in the secondary mortgage market.
American Home Mortgage noted that this disruption has fueled concerns in the market regarding credit risk, causing many market participants to suspend the purchase of loans from a variety of originators including American Home. Accordingly, American Home is currently experiencing a hindering of access to its traditional credit facilities. Additionally, American Home’s lenders have initiated margin calls in response to the decline in the collateral value of certain of the Company’s loans and securities held in its portfolio. The Company has received and paid very significant margin calls in the last three weeks and has substantial unpaid margin calls pending. Further pressure on the Company’s liquidity presently exists due to its warehouse lenders effectively reducing, in this environment, their advance rate on new loans made by the Company.
Based on the foregoing, the Company at present is unable to borrow on its credit facilities and was unable to fund its lending obligations yesterday of approximately $300 million. It does not anticipate funding approximately $450 to $500 million today.
American Home Mortgage emphasized that it is seeking the course of resolution, in this environment, that is least disruptive to its business and to the many thousands of home buyers to whom it has committed to provide mortgages. The Company has retained Milestone Advisors and Lazard to assist in evaluating its strategic options and advising with respect to the sourcing of additional liquidity including the orderly liquidation of its assets.
No Worries! California and Orange County (in particular) are different! Read the 2 blogs here and listen to the insightful posts from the bulls. We’re fine–real estate only goes up!
Ha.
So, how many people in the OC are gonna get a pink slip when this place folds?
American Home Mortgage closing tomorrow
BY DANIEL WAGNER | daniel.wagner@newsday.com
3:23 PM EDT, August 2, 2007
American Home Mortgage Investment Corp. will be closing its doors Friday, after several attempts to sell of all or some of its divisions to rival lenders went up in smoke this week, numerous employees said.
Employees said they were contacted by senior management through the course of the day and told that none of their strategic options for remaining open had panned out.
Just after 3 p.m., company founder Michael Strauss sent an email to employees saying, “American Home Mortgage has been forced to close.” It said tomorrow would be their final day of employment.