Mortgage Lender Battered by Credit Crisis
The New York Stock Exchange halted trading in shares of American Home Mortgage Investment Corp. Monday morning pending an announcement from the struggling mortgage lender, which on Friday suspended its dividend.
An NYSE spokesman said the exchange expects the Melville, L.I.-based home lender to issue an announcement during trading hours Monday. The company’s stock plunged almost 40% in premarket trading because of a news release issued late Friday night.
American Home Mortgage Investment said it would not pay the 70-cents-per-share dividend slated to be paid that day. Some of the lender’s financial backers want their money back, and the company said it needs to hold on to cash in case the credit environment worsens.
American Home Mortgage Investment said the turbulent conditions in the mortgage market forced the company to mark down the value of its portfolio of home loans and loan-backed bonds.
Lehman Brothers analyst Bruce Harting downgraded American Home Mortgage Investment to ”underweight” from ”equal weight,” citing the ”continued liquidity crisis that has gripped the mortgage funding markets.”