Indication of housing market collapse?

kathaksung · 07-31-2007, 03:34 PM

Indication of housing market collapse?

This may have touched off the stock market downturn 4 days ago.

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

Friday July 27, 10:19 pm ET

MELVILLE, N.Y.--(BUSINESS WIRE)--American Home Mortgage Investment Corp. (NYSE: AHM <http://finance.yahoo.com/q?s=ahm&d=t> - News <http://finance.yahoo.com/q/h?s=ahm>) 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.

American Home Mortgage Investment Corp. is a mortgage real estate investment trust (REIT) focused on earning net interest income from self-originated loans and mortgage-backed securities, and, through its taxable subsidiaries, from originating and selling mortgage loans and servicing mortgage loans for institutional investors. Mortgages are originated through a network of loan production offices and mortgage brokers as well as purchased from correspondent lenders, and are serviced at the Company's Irving, Texas servicing center. For additional information, please visit the Company's website at www.americanhm.com http://www.americanhm.com.

This news release contains "forward-looking statements" that are based upon expectations, estimates, forecasts, projections and assumptions. Any statement in this news release that is not a statement of historical fact, including, but not limited to, earnings guidance and forecasts, projections of financial results and loan origination volume, expected future financial position, dividend plans or business strategy, and any other statements of plans, expectations, objectives, estimates and beliefs, is a forward-looking statement. Words such as "look forward," "will," "anticipate," "may," "expect," "plan," "believe," "intend," "opportunity," "potential," and similar words, or the negatives of those words, are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict, and are not guarantees of future performance. As a result, actual future events may differ materially from any future results, performance or achievements expressed in or implied by this news release. Specific factors that might cause such a difference include, but are not limited to: American Home's limited operating history with respect to its portfolio strategy; the potential fluctuations in American Home's operating results; American Home's potential need for additional capital; the direction of interest rates and their subsequent effect on the business of American Home and its subsidiaries; risks associated with the use of leverage; changes in federal and state tax laws affecting REITs; federal and state regulation of mortgage banking; and those risks and uncertainties discussed in filings made by American Home with the Securities and Exchange Commission. Such forward-looking statements are inherently uncertain, and stockholders must recognize that actual results may differ from expectations. American Home does not assume any responsibility, and expressly disclaims any responsibility, to issue updates to any forward-looking statements discussed in this news release, whether as a result of new information, future events or otherwise.

Contact:

American Home Mortgage Investment Corp.
Mary M. Feder, 631-622-6469
Vice President, Investor Relations

mary.feder@americanhm.com mailto:mary.feder@americanhm.com

http://biz.yahoo.com/bw/070727/20070727005793.html?.v=1

Fieldmouse · 07-31-2007, 08:00 PM

2% drop is hardly a blip on the radar. American Home Mortgage was predicted months ago to colapse. You should have sold your stock a long time ago if you owned any. If you didn't own any that's good. Now is the time to look at the foreclosure market. There has to be some great deals on the horizon.

Good luck!

burniegoeasily · 08-10-2007, 02:08 PM

I guess this shows the age of the Kat. He needs to see what the normal trends have been. Like fieldmouse said, its more about the low interest rate and ease of obtaining a home loan.

Phil from Maine · 08-11-2007, 06:50 AM

Quote:

2% drop is hardly a blip on the radar. American Home Mortgage was predicted months ago to colapse. You should have sold your stock a long time ago if you owned any. If you didn't own any that's good. Now is the time to look at the foreclosure market. There has to be some great deals on the horizon.

Good luck!

But with the strong economy most of you are talking about why is the housing markets colapsing? I guess it is not as strong as some suggest, so it is time to look at all those foreclosures? I guess the ones with the $$$$$ can keep saying how good things are when they trash the lower wage earners!!!

DougMD · 08-11-2007, 08:36 AM

The housing market is collapsing because the big run up in prices over the past 8 years or so made houses unaffordable for many. They tookon risky floating loans whose interest rates and accompanying mortgage payments rose, to the point where they are having trouble making payments. Those who take on risk should bear the burden when things go the wrong way. After all, if interest rates decreased, they wouldn't be forced to pay back their savings.

James B · 08-11-2007, 12:20 PM

The housing market is suffering a small hic-up. When you look at what home prices have been doing, how could keep up that rate? Who could afford to buy a home with the inflated prices? It had to slow down. The overall economy is doing well although I agree the good times are not quite reaching the lower end wage earners. Under the Repubs, the very rich get richer and the poor get poorer. Under the Libs, The rich get richer and the very poor get richer. In both cases, the middle class pays the bills.

Fieldmouse · 08-11-2007, 12:42 PM

Quote:

ORIGINAL: James B

The housing market is suffering a small hic-up. When you look at what home prices have been doing, how could keep up that rate? Who could afford to buy a home with the inflated prices? It had to slow down. The overall economy is doing well although I agree the good times are not quite reaching the lower end wage earners. Under the Repubs, the very rich get richer and the poor get poorer. Under the Libs, The rich get richer and the very poor get richer. In both cases, the middle class pays the bills.

Care to back that up with some fact's james? You've been drinking way too much kool aid in the hot weather.

CalHunter · 08-11-2007, 01:01 PM

I guess it depends on your point of view. Wages aren't going down but housing prices are. There isn't some huge increase in unemployment yet and the market seems to be adjusting. If you look carefully at the mortgage industry, you would see that they had loosened up their requirements considerably and were making what were risky loans that depended on a superheated housing market's price increases to secure. In some ways, this outcome in the mortgage industry was ineveitable because the astronomical housing price increases were not indefinitely sustainable.

The net results are instead of housing prices having tripled in the last 11 years, they have dropped back down to having doubled perhaps. That's still an unbelievable increase for somebody who bought a house 11 years ago yet makes it much more affordable for somebody trying to buy their first house. For people on the dividing line between poor and middle class, it is now a buyer's market and they have a better chance at being able to afford a house in a market that is typically down by 30% or more. Interest rates are up some but you can still find 30-year loans for not much over 6% interest. I think this is an opportunity for homebuyers, including upper poor and lower middle class wage earners.

Phil from Maine · 08-15-2007, 07:04 PM

Quote:

I guess it depends on your point of view. Wages aren't going down but housing prices are. There isn't some huge increase in unemployment yet and the market seems to be adjusting.

I have to agree it depends on your point of view.. Here factories have been shutting down yearly putting good people out of work. The housing market is forced to drop because of a lack of buyers. The interest rates may remain the same but, the value of your home does not. As those factories shut down the surrounding communities are forced to cut back survices and increase taxes as the tax base is gone. The wages that were once made are no longer there, and people either move on or try to live of welfare programs. This is the way progress has been going up here now for the last 4 or 5 years.. Why look at the state and it's borders and you will see 3/4ths of it surrounded by Canada and about a quater of it by New Hamshire. Free trade is great isn't it? Most of the lower 48 only feels a little of it right now but that is changing very rapidly. You will be seeing alot more of this in your area in the not to far of a future..

Fieldmouse · 08-15-2007, 11:06 PM

Quote:

I have to agree it depends on your point of view.. Here factories have been shutting down yearly putting good people out of work. The housing market is forced to drop because of a lack of buyers.

Then why are you living where you are? There are areas booming right now all over the country. Companies can't find enough people to fill their payrolls. Yet you choose to stay where your at and complain the "goverment" isn't doing enough for you.