Fresh Layoffs at American Home Mortgage

July 27, 2007 No Comments »

American Home Mortgage Investment Corp., the Long Island-based mortgage lender has announced the lay off of 228 employees, bringing the number of job cuts this month to 428 people.

Unsurprisingly, subprime was again the reason behind the mortgage layoffs at American Home Mortgage, which acts as a real estate investment trust.

American Home Mortgage Investment Corp. generates loan origination, and sells the loans off as mortgage-backed securities, MBS on Wall Street.

While that business model served well for the last few years during the housing boom, many investors are now turned off to MBS, citing high foreclosure rates, mortgage fraud, and mortgage defaults.

Mary Feder, vice president and director of investor relations, said the company was simply rightsizing its departments to meet market demand, shudder…

In other words, our business model is no longer profitable so we’ll need to downsize quite a bit to stay afloat in the hopes of a similar housing boom in 2008.

The news comes on top of a delayed scheduling of second-quarter earnings, which historically get announced two weeks prior their release in early August.

The company now employs 7,627 employees nationwide, though many believe there will be more job cuts in the near future.

Shares of American Home Mortgage Investment Corp. were down to 10.19, just pennies above their 52-week low of 10.01.

Check out the latest list of closed lenders, mortgage layoffs and mergers.

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