American Home Mortgage stock was off nearly 20% as the company downgraded its 2007 profit estimates. You can learn more here.
The real estate investment trust cited a lack of buyers for its loans, as well as rising delinquencies, for its lowered forecast.
It joined M&T Bank Corp. among lenders to cut profit forecasts amid signs that weakness afflicting subprime mortgages — home loans to borrowers with poor credit histories — may be spreading to higher-quality loans.
American Home specializes in prime and near-prime loans and makes roughly 2.5 percent of all U.S. mortgages.
Interesting to see a major prime player getting hammered now. Are we seeing cracks in the prime market or is this due to their Alt-A portfolio? It seems for the time being to be centered around their Alt-A, but time will tell how well (and long) A-paper holds up…
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