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Investing

American Home Lending (AHM) RIP: A Specter Of Recession?

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published

American Home Lending (AHM) said it would lay-off most of its staff, about 7,000 people. The home lender will also probably seek bankruptcy protection.

According to MarketWatch: "American Home Mortgage said early this week its lenders have initiated margin calls as the collateral value of some of the company’s loans and securities has dropped."

The most troubling part of the demise of the financial firm is that its loans are not primarily sub-prime. As CNNMony writes: "American Home originated $59 billion in loans last year, and mostly to people with better credit than risky subprime borrowers." With hundreds of billions of dollars in low adjustable-rate mortgages moving to higher fixed rates, the big rouble in the mortgage markets is just beginning. Home owners will not be able to sell many homes to pay-off loans due to falling house prices and rising inventory.

If anything puts the US economy into recession next year, it will be a meltdown in middle income mortgage defaults.

Douglas A. McIntyre

Contact [email protected] for any questions or corrections.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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