Subprime meltdown sinks AHM
American Home Mortgage stops loans after I-banks Choke off credit lines; AHM to cut employee base from 7,000 to 750.
By Agencies |
NEW YORK: American Home Mortgage, one of the country’s biggest mortgage companies, said it would cease business on Friday as it becomes one of the latest casualties of a widespread housing downturn.
In a statement late Thursday, American Home Mortgage said it had stopped taking new home loan applications and had notified its employees they would be laid off Friday. “The company employee base will be reduced from over 7,000 to approximately 750,” the distressed mortgage lender said.
“The market conditions in both the secondary mortgage market as well as the national real estate market have deteriorated to the point that we have no realistic alternative,” said American Home Mortgage’s chief executive officer Michael Strauss.
Strauss founded the mortgage lender in 1988. It rapidly grew into one of America’s largest home lenders and originated $59 billion in loans last year, up from 45 billion in 2005.
The Melville, New York state-based firm had revealed Tuesday that it was unable to fund lending obligations of $300 million and also unable to borrow fresh capital to shore up its business.
The US housing market has been in a slump for over a year following a years-long boom and foreclosures have risen rapidly in the past six months, particularly on mortgages granted to Americans with scant savings.
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In a statement late Thursday, American Home Mortgage said it had stopped taking new home loan applications and had notified its employees they would be laid off Friday. “The company employee base will be reduced from over 7,000 to approximately 750,” the distressed mortgage lender said.
“The market conditions in both the secondary mortgage market as well as the national real estate market have deteriorated to the point that we have no realistic alternative,” said American Home Mortgage’s chief executive officer Michael Strauss.
Strauss founded the mortgage lender in 1988. It rapidly grew into one of America’s largest home lenders and originated $59 billion in loans last year, up from 45 billion in 2005.
The Melville, New York state-based firm had revealed Tuesday that it was unable to fund lending obligations of $300 million and also unable to borrow fresh capital to shore up its business.
The US housing market has been in a slump for over a year following a years-long boom and foreclosures have risen rapidly in the past six months, particularly on mortgages granted to Americans with scant savings.
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Also Read:
Credit-default swaps fall for week
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