Accredited Home Lenders - Non-Prime Lender

We have been watching Accredited Home Lenders for months. This morning, we have recieved word that they have ceased accepting new loan submissions. A formal announcement has been emailed out:

Valued Broker,

As you are aware, the non-prime mortgage industry is facing a severe liquidity crisis that's affected even the largest players in our space. Currently, the secondary market for loans has shut down for all but conforming loans and the price for non-prime and Alt-A loans is well below par. Regrettably, there is universal agreement that the market will remain irrational for the foreseeable future.

At Accredited, we've worked hard over these past few months to continue to fund loans. Unfortunately, the market head-winds have become too strong, so we are consolidating six of our loan fulfillment centers, while retaining five centers to cover all time zones in the U.S.  These changes will cut the overall staff by more than half. Our goal is to come out of this storm and deliver what you've come to expect from us: superior service and a broad menu of products for qualified borrowers.

Here's what this means to you:

• Effective August 22, 2007, we will no longer be accepting new loan submissions for approval.
• We will honor all outstanding funding commitments, and expect that the last funding commitments will expire in early September.

If you have any questions, please contact the division office that has processed your business in the past. For now, offices remain open with a core support team on hand to provide assistance.

Thank you for your support during these turbulent times. We will keep you updated on events here at Accredited and genuinely hope that we can do business together again in the not-too-distant future.

Sincerely,

Joseph J. Lydon
President and Chief Operating Officer
Accredited Home Lenders

A CNN article notes that Accredited will be cutting 1,600 jobs.

Original Ailing/Watch posting:

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In the same kind of liquidity crunch that has taken out numerous other non-prime lenders. Margin calls have hit it for $190 mln in 2007. The company is now exploring firesale-type options, workforce reductions, and just "the kindness of strangers" in general. Stay tuned.

The stock has tanked from about $20 to $4 in March.

Update March 16th: Accredited has managed a fire sale selling off loans at a discount to buy some time to consider "strategic options". By strategy, they mean scrambling to find a someone to take their business over.