Banking & Finance

American Home Mortgage Carnage Continues in Mortgage Land (AHM, BSC, LEND, NLY, CHC, TMA)

American Home Mortgage Corp. (NYSE:AHM) shares traded over 30 million shares yesterday after being halted for a day and a half.  It is likely that the sub-Saharan tribal residents know of the company’s woes by now and the story has been well exposed.  This was somewhere around an 85% drop yesterday with shares closing down at $1.04 on the day.

This morning, shares are back to $1.01, but it appears that shares traded as high as $1.33 on the day.  There are many who now believe that the margin calls and inverted liquidity crunching its books will implode the company.  It is trying to secure financing, and that will be up to you to decide if they can secure it or not.  We have seen roughly 6 million shares trade so far in the first 15 minutes of trading and it is expected that this will be one of the most active stocks on the day.

As always in near-implosion names, beware the rumor mill as chat room investors talk shares both up and down on no news out of the company.  Other mortgage names are seeing pressure as well after Bear Stearns (NYSE:BSC) is reportedly having another fund write-off.  Accredited Home Lenders (NASDAQ:LEND) are down over 4% today; Annaly Capital Management (NYSE:NLY) is down 1.1%, Thornburg Mortgage Inc. (NYSE:TMA) is down roughly 6%, and Centerline (NYSE:CHC) is down nearly 6%.

Jon C. Ogg
August 1, 2007

Jon Ogg can be reached at; he does not own securities in the companies he covers.