Ready, Set, File!
Following the footsteps of American Home Mortgage, Aegis Mortgage Corp., once one of the nation’s top 30 largest mortgage lenders, filed for Chapter 11 Bankruptcy in Delaware last Monday, a few days after it laid off more than half of its 1,300 employees.
Since the start of this year, more than 50 mortgage lenders have sought bankruptcy protection from their creditors. (msnbc). What’s worse is that the number keeps growing with no end in sight. Now, it appears that Countrywide Financial, the largest U.S. mortgage lender, may be forced into bankruptcy, too. “There is a scenario,†wrote Paul Miller, a Friedman, Billings, Ramsey & Co. analyst, “in which the current liquidity crises last for longer than three months and Countrywide is forced into bankruptcy; it will be ugly, but it can happen!†(Yahoo! News).
Meanwhile, the Fed is silent. Let’s hope that silence is [still] golden.