American Home – A Self-Fulfilling Prophecy

It’s an amazing thing when life imitates art… I guess it wouldn’t have been a bad bet to bet on FTI Consulting playing a role. But it means I am way too close to this stuff.

How long before Deloitte resigns or is thrown out? It’s best for them to draw a line in the sand before this goes too far. They will inevitably become involved in, or the subject of, the lawsuits. And they are probably pretty busy over at Bear Stearns.

Tomorrow I take a break to have dinner here in Chicago with this guy. A good time is planned by all and an update next week on what he’s really like.

American Home to Declare Bankruptcy, Employees Told by Managers

American Home Mortgage Investment Corp., a U.S. lender that halted operations yesterday, intends to file for bankruptcy, according to two employees told of the decision by managers in meetings…American Home would become the second-biggest U.S. mortgage lender to seek bankruptcy protection this year and the biggest that caters to people with good credit…Regulators in New Jersey, New York, Connecticut, Ohio and Massachusetts today suspended American Home’s lending licenses for failing to deliver at least $750 million of loans promised to thousands of borrowers. States took similar actions following the collapse of New Century and Mortgage Lenders Network USA Inc., another subprime lender.

A call to American Home spokeswoman Mary Feder was greeted by a message saying her voice mail was full. No one could be reached on the company’s main phone number. Neer declined to comment when reached by phone.

In an e-mail to employees yesterday, American Home founder and Chief Executive Officer Michael Strauss, 48, said conditions in the U.S. mortgage market have “deteriorated to the point that our business is no longer viable.”

A group of American Home’s creditors have agreed to hire FTI Consulting Inc., a Baltimore-based advisory firm specializing in bankruptcies and financial restructurings, Ronald Greenspan, senior managing director in FTI’s Los Angeles office, said yesterday. The firm served this year as the financial adviser to creditors in the bankruptcies of New Century; Middletown, Connecticut-based Mortgage Lenders Network and ResMae Mortgage Corp.