American Home Mortgage Quarterly Report Shows Delinquencies Up

In its third quarter report issued Thursday, October 26, American Home Mortgage reported "sharply" higher portfolio delinquencies and an increase in repurchases of previously sold loans that were delinquent. Still, the company posted net earning up 35.4 percent to $72 million up from $53.2 million a year ago. Earnings per share were $1.36.

The company, based in Melville, N.Y., added approximately $906.8 million in loans during the quarter. The company held $5.4 million back for losses and $12.5 million in reserve for non-performing loans, double the reserve it maintained from last year.

The figures for non-performing loans in the quarter increased to $66.9 million, compared to some $33.5 million in 2005.

Michael Strauss, Chief Executive Officer said in a statement released by the company, "Third quarter results were accomplished during a period that was particularly difficult for our industry; a period that included the adverse impacts of an inverted yield curve, falling national housing prices, reduced national loan originations, and servicing write-downs due to lower interest rates. In addition, our company did not experience a loss in its mortgage-backed securities portfolio as had been the case in several of the previous quarters, but instead had a net portfolio gain of $3.4 million."

American Home Mortgage and other companies in the industry are fighting a growing housing slump in the United States with spending on new homes down 17.4 percent, the largest decline in more than fifteen years. The trend reflects the weakest performance of the U.S. economy in more than three years.