Lone Star may extend the tender offer for additional periods, and ifLone Star decides to extend it will issue a press release announcingsuch extension not later than 9:00 AM EST on the next business dayafter the day the tender offer is scheduled to expire. Lone Star saysit expressly reserves all of its rights and privileges under the mergeragreement with the Company, including its right to allow the tenderoffer to expire to terminate the merger agreement under certaincircumstances, as permitted by the merger agreement.  In other words,it still says it can walk away if it chooses.

Lone Star currently anticipates that the Company may make requests forfurther extensions of the tender offer and subject to and conditionedupon the merger agreement being in full force and effect and theCompany’s satisfaction of the conditions therein, Lone Star expectsthat further extensions of the tender offer may be made as and whenrequired by the merger agreement.  So it doesn’t seem likely that thiscloses tomorrow.

Here is the background and the out part for the company: On August 10,2007, Lone Star filed with the SEC an amendment to its Tender OfferStatement in which it indicated that, as of that date, the Company hadnot satisfied all of the conditions to the closing of the tender offer.As of today, Lone Star continues to believe that the conditions toclosing under the merger agreement remain unsatisfied. Pursuant to themerger agreement, so long as one or more conditions to the closing ofthe tender offer remain unsatisfied, the Company may request Lone Starto extend the tender offer, which Lone Star shall do for a period of nomore than ten business days.

As of the close of business on September 11, 2007, Lone Star hasreceived a number of tendered Company shares, subject to withdrawal,representing approximately 18,448,957 of the outstanding shares of thecompany. The shares tendered at that time included approximately 73.44%of the outstanding shares of the Company’s common stock.  Piper Jaffray& Co. is acting as Dealer-Manager for the tender offer.

Accredited Home Lenders shares are up almost 4% on thin volume as anytime there is an "extended tender period" shareholders interpret thisas "it’s not totally dead" on the merger hopes.  In early August,shares were trading under $5.00 because the merger looked entirely deadand the future of the company was at risk if it had to run on entirelyon its own.

Jon C. Ogg
September 13, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7Wall St. Special Situation Investing Newsletter and he does not ownsecurities in the companies he covers.

The initial settlement of a pool consisting of approximately $500 million closed on Friday, August 17, 2007, with the remaining loans trading every other week as borrowers make their first payments due under the loan. The final sale of the loans is expected to occur by October 2007.  Accredited has the ability but not the obligation, in its sole discretion, to repurchase all of the loans traded through mid-November 2007 at a premium to the advance rate. If the loans are not repurchased by the Company by mid-November, the Company’s call right to repurchase the loans expires and the investor will keep the loans with limited recourse to the Company.

James A. Konrath, chairman & CEO, stated "If the market improves to a rational level, our intention is to repurchase these quality loans by mid-November and sell or securitize them."

It is anticipated that the transaction will neither produce nor use any significant liquidity at time of funding, but this will reduce AHL’s exposure to margin calls on these loans since the agreement does not permit the investor to decrease the advance rate during the 90-day repurchase period. 

Here is how the company says it will look after the transaction: Accredited has approximately $600 million of loans not covered by this agreement funded by warehouse credit facilities and Company cash.  Terms of the transaction include a small holdback reserve to allow thepurchaser to reject loans that do not meet certain criteria.

For those of you who are not familiar with these "other investors" out there, it sure sounds like there is starting to be some vulture investing out there where investors are gobbling up mortgage loans on the cheap.  We noted some vulture activity starting to be seen just yesterday.  Prices are all over the place depending upon the collateral and the structure of each loan pool traunch.  The good news is that this looks like it will get the bulk of the loans off the books.

Jon C. Ogg
August 21, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Lone Star Funds has a buyout offer for Accredited Home Lenders, but the obvious fear is that it will either back out entirely or that it will take the juice out of the buyout.  The company is also trying to renegotiate terms to avoid defaulting and avoid a liquidity crunch.  It is also now delinquent in SEC filings.  Accredited Home Lenders shares are down over 20% to just over $6.25.  Its 52-week trading range is $3.77 to $47.82.

How would you like to own that at $40+ and be wondering if the company can make it back up there?  You know that happened to some.  Ouch.

Jon C. Ogg
August 2, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.