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August 02, 2007
The subprime disaster is hitting close to home
Two weeks ago, a guy from American Home Mortgage cut me a check for far more money than I've ever seen in my life, which was promptly handed to the seller of the condo I bought. Today, American Home Mortgage went bankrupt. Forbes says:
Although Thursday began on a hopeful note for American Home Mortgage Investment, by the close of business, the business seemed to have closed.Employees of the Melville, N.Y.-based mortgage real estate investment trust apparently received an email from Michael Strauss, the company’s chairman, at a little after 3 p.m., stating that their last day of employment would be Friday. A copy of the email was provided to Forbes.com by an employee who asked not to be identified. Reached by telephone, another employee said, "We are no longer in business as of this afternoon."
“It is with great sadness I announce today that American Home Mortgage has been forced to close. Unfortunately, the market conditions in both the secondary mortgage market as well as the national real estate market have deteriorated to the point that our business is no longer viable,” Strauss wrote.
AHM is not a sub-prime lender, and I'm not a subprime borrower. But my loan is risky in just about every other way - 100% interest-only adjustable-rate financing with a high back-end backed by an asset in a risky part of the island.
The impact to me will be minimal, since the check has been written. But had this implosion happened just two weeks earlier, I'd have been SOL.
Posted by adrianjo at August 2, 2007 08:57 PM