It looks like this thing is spreading all over the place.
“American Home Mortgage Investment Sees Lower 1Q, Full-Year Earnings
MELVILLE, N.Y. (AP) — Mortgage lender American Home Mortgage Investment Corp. said Friday it expects lower first-quarter and full-year earnings due to secondary mortgage and mortgage-backed securities markets conditions.
“These markets were characterized by far (fewer) buyers offering materially lower prices, both for loan pools and for ‘AA,’ ‘A,’ ‘BBB’ and residual mortgage securities. These changes had a significant, adverse impact on our company’s first-quarter results, reducing our gain on sale revenue and causing mark-to-market losses in our portfolio,” Chairman and Chief Executive Michael Strauss said in a statement.
The company sees first-quarter net income of 40 cents to 60 cents per share. In January, American Home forecast quarterly earnings coming in 9 percent to 15 percent higher than prior-year results of $1.02 per share.
Analysts surveyed by Thomson Financial estimate profit of $1.06 per share.
American Home assumes current market conditions will persist, resulting in a lower full-year outlook.
The company now anticipates full-year earnings between $3.75 and $4.25 per share. It previously predicted net income of $5.40 to $5.70 per share.
Analyst consensus estimates put full-year profit at $5 per share.
The company will reduce its quarterly dividend to 70 cents per share because of the reduced first-quarter and full-year outlooks. The new policy applies to the second-quarter dividend payable in July. American Home raised its quarterly dividend by 6 cents to $1.12 in January.
Some of American Home’s business comes from subprime mortgage loans, but its main focus is on the prime mortgage market.”
The interesting thing about this is what they said about the A paper loans.
“In particular, these markets were characterized by far few buyers offering materially lower prices, both for loan pools and for “AA”, “A”, “BBB” and residual mortgage securities”
