July 31 (Bloomberg) -- American Home Mortgage Investment Corp. shares
plunged 90 percent after the lender said it doesn't have cash to fund new loans,
stranding thousands of home buyers and putting the company on the brink of
failure.
Investment banks cut off credit lines, leaving American Home without money
yesterday for $300 million of mortgages it had already promised, the Melville,
New York-based company said in a statement today. It anticipates that $450
million to $500 million of loans probably won't get funded today, and the lender
may have to sell off its assets.
As Atrios pointed out today, the quick calculation would say that 15-hundred people, give or take, didn't close today on that home they thought they were buying. I would suppose an equivalent number will be disappointed tomorrow. Who knows what comes after that, but the trickle-down impact will certainly be huge, and that's a helluva a lot of money no longer pumping through the economy.
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