Another lender on the ropes

Good morning again. Another lender is on the ropes, and this is not a sub-prime problem: "American Home Mortgage Investment shares sank on Monday after the home loan provider announced "major" writedowns, delayed a dividend, and said lenders were demanding it put up more cash."

More, from Reuters via CNBC.com: "American Home, based in Melville, New York, specializes in prime and near-prime loans. It has, however, made many loans that allow borrowers to produce little documentation. Such loans are often considered riskier. The company recently commanded a roughly 2.5 percent share of the U.S. mortgage market.... 'Bankruptcy is not out of the question,' said Matt Howlett, an analyst at Fox-Pitt Kelton Inc. in New York. 'It needs to find a partner with alternative funding and hope the market turns around. It's going to be tough.'

Thoughts? Comments? Insights of staggering insighfulness? Email story tips to lalandblog@yahoo.com.

Comments

[Cal]

Haven't we heard this tune before? Monoline lender hit by margin calls. Ever since the downgrades in late June the conditions have been nearly identical to late February/Early March where the first major round of blow ups happening. The biggest difference now is the size of the players left and the fact that underwriting was already tightened significantly. Some companies can take the hit and close a division (no buyers left for a subprime company) others just go away.