American Home Mortgage is firing more than 6000 out of 7,000+ employees, effective today. It has ceased taking mortgage applications and will maintain its thrift and servicing businesses. Shares traded below $1 in after-hours trading yesterday.
Accredited Home Lenders, another troubled mortgage lender, filed its annual report yesterday. The company’s public accountant Squar, Milner, Peterson, Miranda & Williamson LLP said that, if the previously announced merger with Lone Star does not close, Accredited may not be able to operate as a “going concern”. If the situation in the mortgage industry does not improve, Accredited may have to file for bankruptcy and exit the business.
The acquisition agreement with Lone Star priced Accredited at $15.10 per share, compared to the stock’s current price of a little more than $5. Accredited said that it is “proceeding as planned” toward closing the merger, but analysts believe that terms will have to be renegotiated if the transaction is to take place at all.
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