Before the REIC spun out of control, you used to have to have private mortgage insurance if you didn't put 20% down. And now? Anarchy and collapse.

Another great "innovation" these past few years is the 80/10/10 piggyback, where you could borrow 100% of your home purchase, and avoid PMI.

What great thinking! Who needs stinking insurance! A relic of the past!

Tell that to the hedge funds, pension funds, foreign countries and everyone else that will get killed during the mortgage meltdown. With PMI in place, investors would have been protected against default.

No more.

World - you're on your own. We figured out a way to game the system and make you the bag holders. Countrywide, IndyMac, American Home Mortgage and the rest of the mortgage conmen on commission found a way to enrich themselves short term, and leave you holding the bag.

You ain't gettin' paid back. Now deal with it.

Mortgage Mess: Clean-up in Aisle Three!

Looks like we're not gonna need government regulation of the mortgage market after all. The market is gonna take care of this mess for us

The days of liar's loans, stated income, no-money-down, negative amortization, teaser rate, adjustable rate, high LTV toxic mortgage crap went the way of the pets.com puppet.

Why? Because the loans didn't get paid back, and the bagholders said no-more.

So all of the companies involved in that crap have gone out of business, or are on their way out.

It's funny, the Senate will hold hearings in 2008 on this disaster, all kinds of new laws and regulations will go into effect, and in the end it won't matter. The market, as it always does, cleans up its own messes.

The only problem though is that this mess was massive and historic, and the clean-up will be devastating.

A little regulation would have gone a long way in 2002, 2003, 2004. But now that the market had to do it, versus our corrupted and incompetent Congress and President, the cleanup will go on and on an on...

2007, 2008, 2009, 2010, 2011, 2012, 2013, ...

Get used to these statements from failed mortgage lenders and homebuilders

American Home has ceased taking mortgage applications and has notified all of its production employees that they will be separated effective tomorrow, August 3, 2007. Accordingly, the Company employee base will be reduced from over 7,000 to approximately 750. The Company currently is maintaining its thrift and servicing businesses.

Michael Strauss, American Home's Chief Executive Officer, stated,

"It is with great sadness that American Home has had to take this action which involves so many dedicated employees. The employees affected should understand that this is not a reflection on their efforts or their productivity.

Unfortunately, the market conditions in both the secondary mortgage market as well as the national real estate market have deteriorated to the point that we have no realistic alternative."

FLASH: As predicted, American Home Mortgage lays everyone off, shuts doors on Friday. Housing crash and mortgage meltdown now spinning out of control

7,409 employees - gone

Hopes and dreams - gone

All stockholder equity - gone

Tens of thousands of potential homedebtors - gone

Their corrupt list of co-conspirators - here for all to see

And remember, this wasn't a subprime lender - they were mainly prime and Alt-A (Liar's Loans). Anyone questioning the housing crash and mortgage meltdown now? DOLTS!

Here's the email from the CEO getting rid of all the employees (get used to these America):

“It is with great sadness I announce today that American Home Mortgage has been forced to close. Unfortunately, the market conditions in both the secondary mortgage market as well as the national real estate market have deteriorated to the point that our business is no longer viable,” Strauss wrote.

Here's the update on their closure:

NEW YORK, Aug 2 (Reuters) - Mortgage lender American Home Mortgage Investment Corp. is closing its doors on Friday, and has told employees they will be laid off, according to Newsday, citing an e-mail to employees from Chief Executive Michael Strauss.

The company said on Tuesday it could no longer fund home loans and might sell off its assets, after its lenders cut off access to credit. It said on its Web site it is no longer accepting home loan applications.

"Bankruptcy is the next logical step for them," said Steve DeLaney, analyst at JPM Securities in Atlanta.

And here's Forbes from July 20th predicting that all would be well (he he he):

American Home Mortgage Back On Track?

Talk about a rebound! Although American Home Mortgage Investment hasn’t recovered all of the value it lost when the stock plunged on Thursday following a rumor that Lehman Brothers had yanked its credit line, it has certainly made up lost ground.

Another boost to American Homes shares may have been a research note put out by RBC Capital Markets analyst James Ackor saying the stock tumbled on Thursday well below its value

FLASH: American Home Mortgage crashes 35% before trading halted, mortgage meltdown and liquidity crisis spreading

The ratings agencies totally blew it, and now investors in subprime, alt-a liar's loans, jumbo loans and even prime mortgages are getting destroyed.

Why?

Because the system got gamed by corrupt mortgage brokers, appraisers, realtors and builders, and the debt holders got left holding the bag.

Oh, what will IndyMac have to say tomorrow? Should be interesting (yes, short IMB)...

American Home Mortgage Investment Corp (AHM.N: Quote, Profile , Research) shares fell sharply on Monday after the company delayed its quarterly dividend, announced "major" write-downs, and said lenders were demanding it put up more cash.

Shares of American Home were down 39 percent, falling in premarket trading to $6.39 from Friday's close of $10.47. Trading was halted for news pending prior to the market open. The shares on Friday hit their lowest level since April 2003.

Late Friday, Melville, New York-based American Home said it was struggling from "unprecedented" disruption in credit markets. The announcement fed investor worries that bad loans are extending beyond "subprime" lenders to providers of home loans to borrowers considered to be good credit risks.

American Home specializes in prime and near-prime loans. It has, however, made many loans that allow borrowers to produce little documentation of income or assets.

"Bankruptcy is not out of the question," said Matt Howlett, an analyst at Fox-Pitt Kelton. "It's clear now we're in a liquidity crisis. Any loans that aren't pure prime are falling in value."

FLASH: It all falls apart - Alt-A "Liar's Loan" lender American Home Mortgage one step closer to bankruptcy, pulls dividend at 10:19pm Friday night

Man, it's dot-com all over again. Now it's just dot-lenders. One by one these Alt-A "Liars Loan" and Subprime sweat shops are going tits up.

This one's a shocker though. The dividend was already awarded, declared on June 15 for all stockholders of record as of July 9. And then in the late into the night on Friday, they put out this release and say oops, our bad, all of you expecting your dividend are screwed. I bet it was the auditors who finally made them come to Jesus - note they admitted but didn't document that the credit meltdown "has caused major write-downs of its loan and security portfolios"

MARKET TO MARKET. MARKET TO MARKET. MARK TO MARKET.

The market will react furiously to this on Monday. Watch for AHM to trade to near $0, get delisted, see shareholder lawsuits, announce their layoffs, and then the march to bankruptcy.

Wow. Friday night. 10:19pm. Wow. Thanks Richard for the tip.

IndyMac - you're next (yes, I'm short IMB). Your Mark to Market is going to be a shocker.

American Home Mortgage Investment Corp. Delays Payment of Quarterly Common Stock and Series A and Series B Preferred Stock Dividends

American Home Mortgage Investment Corp. (NYSE: AHM - News) announced today that its Board of Directors has decided to delay payment of its quarterly cash dividend on the Company's common stock and anticipates delaying payment of its quarterly cash dividends on its Series A Cumulative Redeemable Preferred Stock and Series B Cumulative Redeemable Preferred Stock in order to preserve liquidity until it obtains a better understanding of the impact that current market conditions in the mortgage industry and the broader credit market will have on the Company's balance sheet and overall liquidity.

The disruption in the credit markets in the past few weeks has been unprecedented in the Company's experience and has caused major write-downs of its loan and security portfolios and consequently has caused significant margin calls with respect to its credit facilities.

The quarterly cash dividend of $0.70 per share on the Company's common stock had been declared on June 15, 2007 and was to be paid on July 27, 2007 to all shareholders of record as of July 9, 2007. The Series A Preferred Stock dividend and Series B Preferred Stock dividend had been declared on June 15, 2007 and are payable on July 31, 2007, to shareholders of record as of July 9, 2007.