US mortgage giant ceases new business, lays off thousands
American Home Mortgage, one of the country's biggest mortgage companies, ceased new business Friday and blamed its woes on the stricken US housing market and a related credit crunch. Numerous mortgage lenders have gone out of business in recent months, but American Home Mortgage is one of the largest to be hit by problems. It minted 59 billion dollars in loans last year, up from 45 billion in 2005. In a statement late Thursday, the home loan giant said it had stopped taking new mortgage applications and had told most of its employees they would be laid off Friday. "The company employee base will be reduced from over 7,000 to approximately 750," the distressed firm said. "The market conditions in both the secondary mortgage market as well as the national real estate market have deteriorated to the point that we have no realistic alternative," said American Home Mortgage's chief executive Michael Strauss. The multitrillion-dollar US mortgage sector has been buffeted by a national housing slump, a sharp rise in home foreclosures, and tightening credit conditions which makes it difficult to borrow fresh cash and offer new loans.