Well it's been an interesting couple of days in the mortgage industry.  American Home Mortgage is slowly dying...looking for someone to purchase it or step in and give it some cash which will probably never happen.  They have retained attorneys and consultants to try to find the best way to get through this mess including an orderly liquidation of assets. 

This to me tells me that the worst is here for AHM.  What makes this such a one two punch for the mortgage industry is that up until this point, it seemed that delinquencies and defaults were coming from the sub prime market.  Well AHM is not a sub prime lender, they are primarily an Alt A lender but they have some Prime product too.  Now Alt A is basically not quite A paper, but is still considered good it just can't quite fit in the small box of A paper.

The thing is the liquidity problem that AHM has, could ripple through to other Alt A lenders in which case Alt A lenders will be forced to tighten programs and guidelines even more than they are now just as sub prime lenders keep doing.  We'll have to wait and see what happens in the next few days and we'll have to wait and see what happens to other Alt A lenders.  I have heard that Accredited lender is having trouble too...so who's next?

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