Wednesday, August 29, 2007

IndyMac hiring former American Home employees

IndyMac has hired 600 loan officers who lost their jobs when American Home Mortgage filed for Chapter 11 bankruptcy protection a few weeks ago. American Home fired 6,000 employees when its lenders refused to provide further financing after the lender failed to meet margin calls.

Such a move by a mortgage lender is quite unusual in the current circumstances, as most mortgage companies are downsizing amid shrinking credit availability and financial turmoil. According to this website, more than 100 mortgage providers have gone out of business so far this year, but the problems are not contained to subprime lending alone or even to mortgage lenders in general. According to a CNNMoney article, credit card delinquencies have risen significantly from last year. Until recently, credit card payments could be financed by tapping home equity, but now that a large percentage of all homes have virtually no equity left in them, credit card delinquencies are likely to rise further.

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