Countrywide/American Home Lender filing bankruptcy?

[tyedyeto]

http://quote.bloomberg.com/apps/news?pid=20601087&sid=akujZzPrI_ss

July 31 (Bloomberg) -- American Home Mortgage Investment Corp. shares plunged 90 percent after the lender said it doesn't have cash to fund new loans, stranding thousands of home buyers and putting the company on the brink of failure.

Investment banks cut off credit lines, leaving American Home without money yesterday for $300 million of mortgages it had already promised, the Melville, New York-based company said in a statement today. It anticipates that $450 million to $500 million of loans probably won't get funded today, and the lender may have to sell off its assets.

``They can't function without access to capital,'' said Bose George, an analyst with KBW Inc. in New York. ``The company either has to file for bankruptcy or go through some type of rescue or restructuring, and either way will leave almost nothing for the common shareholders.''

American Home caters to borrowers whose credit scores fall just short of standards for top-rated mortgages. The announcement provides fresh evidence that defaults may be spreading from subprime borrowers with the worst credit scores to homeowners with more reliable payment records. The biggest U.S. mortgage lender, Countrywide Financial Corp., said last week late payments rose among some of its most creditworthy clients.

Shares of American Home, halted by the New York Stock Exchange early yesterday, plummeted $9.43 from their close on July 27 to $1.04 as of 4:15 p.m. in NYSE composite trading. They sold for $6.39 in pre-market transactions yesterday. Two years ago, they fetched almost $40




Commercials still on the air (heard one less than 10 minutes ago) but I've been hearing they have or are about to file bankruptcy.

What happens to mortgages held by them if they do file?

My s/o had a mortgage through another company which was bought up by Countrywide 2 years ago. If they file, where does that leave the homeowners?

[Zywiec]

1. Where did you read Countrywide was filing for bankruptcy? n/t

[tyedyeto]

3. Did you read the above link?

`The company either has to file for bankruptcy or go through some type of rescue or restructuring, and either way will leave almost nothing for the common shareholders.'

[Zywiec]

8. Are we reading the same article?

It looked like it was talking about American Home Mortgage Investment Corp.

[tyedyeto]

11. They are one and the same

[Zywiec]

12. So you're saying American Home Mortgage and Countrywide are the same?

Hmmm, where did you get that from your article?

[LisaL]

2. That's an excellent question.

If the company files, what happens to home loans?
Maybe that means the rest of the loan is forgiven? Somehow I doubt it, but one can dream, can't one?
:rofl:

[flyingfysh]

5. the loan is not forgiven

If the loan holder goes bankrupt, the loan becomes an asset to be sold to someone else. You still have to pay off your loan, but you may be paying it to someone else.

[Bluebear]

7. Just curious, do they discount the loans?

Or does the obligation remain the same?

[ingac70]

6. The loan will be sold off...

to other companies if there is a total going out of business bankruptcy.

[A HERETIC I AM]

4. American Home Mortgage and Countrywide Financial are two different companies

http://my.countrywide.com/

https://www.americanhm.com/index.aspx

AHM is the one whose stock went down to $1.04 today.

Countrywide closed at $28.17. (7/31)

[tyedyeto]

10. I thought they were one and the same...

according to their commercials.

My s/o has a mortgage on where we live. It was NOT a countrywide mortgage initially but a year ago it became one, without any notice. If he had known, he would have found a different lender since he distrusts Countrywide/American Home Lender.

[Zywiec]

13. Thanks for providing some clarity to this thread

The title seems a little misleading...

[A HERETIC I AM]

15. Not too hard to confuse them, i suppose. Check out AHM's "Investor Relations" page:

http://phx.corporate-ir.net/phoenix.zhtml?c=68091&p=irol-IRHome

I have a feeling this page will be updated this time tomorrow so they can get rid of that bright red -$9.43 figure.

Of course, that doesnt tell half the story.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ahm&sid=0&o_symb=ahm&freq=1&time=7
Just over $35.00/share at the beginning of March.

I found it interesting that at the end of the day, AHM dividend yield is showing as a whopping 269%. That is because they were paying a $2.80/share dividend and the reports and quote systems have yet to remove the dividend from the calculations. $2.80 is respectable as hell for a $35 share. I somehow doubt stockholders are going to see their next quarterly dividend payment though.

[karlrschneider]

9. "No one can do what Countrywide can"................evidently.

But those are different outfits....

[whistle]

14. Gee, I wonder how many of their loan officers who are paid strictly

...commissions for loans they closed will get left holding the bag on back pay?