Hundreds of New Instanrt Home Inspectors Seek Work

[Joseph Burkeson, CMI]

American Home Mortgage lays off hundreds

BY DANIEL WAGNER
daniel.wagner@newsday.com

July 11, 2007

American Home Mortgage Investment Corp., the Melville-based real estate investment trust, has laid off hundreds of workers without notice or even time to clear out their desks, current and former employees said this month.

The company, which holds diverse interests in mortgage-related securities and retail lending, was once considered a highflier, posting double-digit growth quarter after quarter in recent years.

But as things turned south for many housing-related businesses, American Home has offered what one analyst called "overly rosy" earnings predictions.

American Home representatives have declined repeated requests for interviews or additional information during the past month. Shares closed yesterday at $17.27 in New York Stock Exchange trading - the lowest since 2001, when AHM was much smaller.

"There was no sympathy, no compassion," said Richard Pascarella, 48, who said he was fired May 28 from his job procuring information technology equipment for American Home's branches.

Pascarella, who worked at American Home Mortgage for nearly two years, said that at the time he was laid off American Home was still acquiring underperforming retail mortgage brokers - a key company strategy.

Bryan V. Davis, 30, who worked in telecommunications auditing for American Home, had been promoted shortly before he was fired this summer. He said his impression was that managers were told, "We've got to get rid of people, so if you've got anybody you want to get rid of, you can."

Both described secrecy surrounding the scale of the layoffs and could only confirm the 10 or 20 that had occurred in their own departments and those where they had friends.

But several current and former employees, speaking on condition of anonymity for fear of reprisal, said there was a total of about 200 layoffs.

As of mid-May, American Home had employed about 1,460 people on Long Island.

Analysts said that layoffs are inevitable due to the cyclical nature of the mortgage business and that they believe the company will ultimately weather the cycle.

Still, Bose George of the Manhattan-based investment firm Keefe, Bruyette & Woods, Inc. said American Home is particularly vulnerable because it does not have diversified operations in other areas of banking.

[Bob Elliott]

Nothing suprising there.

[James H. Bushart]

I wonder how many of them, as a result of losing their jobs, will soon be defaulting on their home loans. Funny how this trend seems to feed on itself.