American Home Mortgage Is Shutting Its Doors

    “It is with great sadness that American Home has had to take this action which involves so many dedicated employees,” Chief Executive Michael Strauss said in a statement.

    Those words echo true for the nearly 7,000 employees that will be laid off today from American Home Mortgage.  AHM has been rocked by creditors who have lost faith in their business.  AHM's business is ALT-A loans.  Alt-A loans are loans to people with less than perfect credit.  These people usually have credit scored from 600 to 660.  This accounts for around 40% of the United States.  

    A couple days ago I spoke of the impact that the failing mortgage industry will have long term.  I want to reiterate that here.  The impact of this companies fall, and others like it, will hit home to almost every American.

    These 7,000 people are now unemployed.  With the latest report that job growth is weaker than expected these people can expect longer time away from the job market than in recent history.  You must also take into account the investors who will lose money on the AHM closure.  The average Joe will feel that harder than the larger pocketed investors.  

    I don't consider myself a naysayer.  There is a positive in all of this.  Those investors who have all their ducks in a row have good times coming.  If you have the cash available to purchase you will make out in the coming 18 months.  If you have your cash tied up in investment equity, I would try to leverage it out now as the standards for lending are going to tighten up severely.

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