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US mortgage company collapse hits markets


US mortgage company collapse hits markets


The news of the collapse of American Home Mortgage Investment Corp has been weighing on markets since it was announced Thursday night. The company, the latest victim of the housing slump in the US, has confirmed it will shed almost 7,000 jobs, around 90 per cent of its workforce, and close virtually all operations. It is thought it could seek bankruptcy protection on Monday. American Home’s plight shows how problems in the US mortgage market are broadening. Credit quality issues are beginning to affect lenders focussed on borrowers with good credit ratings as opposed to so-called sub-prime borrowers who are thought to be a greater risk. Founded in 1987, American Home last year claimed to be the US’s 10th biggest retail mortgage lender.

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