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American Home Mortgage Investment Corp., which let go of hundreds more employees, disclosed it has been hit with margin calls and will suspend dividend payments.
On Thursday, the Melville, N.Y.-based lender notified 228 employees their jobs were eliminated, spokeswoman Mary Feder told MortgageDaily.com Friday. “We’re right sizing our departments in response to market conditions” in order “to keep our departments efficient during challenging times for our industry,” Feder said. American Home said it may report a second quarter loss primarily because of substantial charges related to repurchases of stated-income loans with high loan-to-value. The company cited the second quarter would be a period of “cleanup” as the impact from the discontinued stated-income product continues to wind down. The layoffs, which occurred without an advance warning, were throughout the country and did not affect sales positions, according to the spokeswoman. Feder noted that 77 of the layoffs were at the headquarters, but the hiring of 50 employees with “different skills sets” than those let go translated into a net loss of 27 there. The affected workers received severance based on the company’s policy. Feder did not know details of the severance involved. Thursday’s layoffs follow about 200 loan processing and back office job cuts in June. The two rounds of eliminations leave the real estate investment trust with staff of about 7,600, Feder said. On Friday, the real estate investment trust reported it would delay payment of the quarterly cash dividend on its common and preferred stock. The suspension of payments are an effort “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,” Friday’s announcement said. “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.” American Home noted its warehouse lenders have hit it with “significant margin calls.” |
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