A.H. LENDERS: how many people in San Diego will be fired?

[paranoid]

A.H.Lenders is located 92128, and has 4,196 employees in total. There is a big chance that it will go bankrupt. Anybody knows how many employees are local to SD? I suspect many of them will lose their jobs and even sell their homes.

[lendingbubblecontinues]

If they keep ANY, they have kept too many, in my not so humble, being validated every single bleeping day, opinion.

[Happy renter]

Yes! It means there will be additional 4,196 houses being foreclosed in SD!!

[(former)FormerSanDiegan]

Yes! It means there will be additional 4,196 houses being foreclosed in SD!!

Wow. Those lender company’s employees sure have a high ownership rate.

[Happy renter]

No! May be 8,392 houses since I assume each employee has at least 2 houses to flip around.

Seriously, I am sure there are a lot of flippers work in the mortgage and real estate industries.

[Anonymous]

How many bought condos downtown in the last 2 years?

[paranoid]

Accredited Home Lenders (nasdaq: LEND – news – people ) announced it had agreed to sell about $2.7 billion of its mortgages to an undisclosed buyer. Accredited said it was selling them at a “substantial discount.”

the stock has recovered from $3.77 to 11. can the lenders be saved some how? I’d prefer to see them (immoral) die.

[garysears]

I guess I don’t understand how that price jumped so high with the announcement. LEND traded almost as high as 14 during the day. I understand the 2.7 billion is almost the entire loan portfolio of the company. How can there be earnings in the future of the company to justify the jump? Is this just day trader speculation or can someone explain this?

Also, I understand the sale was in order to meet margin calls. I’m not sure what that means exactly but I assume it means they aren’t out of the woods yet.

[jztz]

LEND is trading based on its prospect of survival. And its survival is based on liquidity at this point. That’s what selling $2.7B does, even at a discount, it gave LEND liquidity. It’s like pawn your valuables at a discount to meet a payment so that you are not forced into bankruptcy.

Margin calls – in this instance I think means that investors asked orginator (LEND) to put up more money/cash to help with increased loan losses.

Regarding the stock jump, even if LEND doesn’t earn anything, once it gets liquidity, then it should trade based on its book value. Right now it’s trading about .2x book with book/share at $34. Suppose write down takes its book value to $17, then the company can still be potentially worth $17, or perhaps more if it survives. This is like someone has cars and houses but no cash, and is facing a big cash payment (a liquidity squeeze). If nobody buys his assets (cars and houses), he’s facing bankruptcy. If he can sell his asset (LEND’s loan portfolio) at good enough prices, then after the big cash payment, he may still be in the black. I don’t know LEND’s financials in detail, so this is just a generic answer on why its stock jump once it sold its portfolio.

[Author]

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