Housing Ugliness Continues

This is really ugly:

American Home Mortgage Investment Corp. shares plunged 90 percent after the lender said it doesn't have cash to fund new loans, stranding thousands of home buyers and putting the company on the brink of failure. Investment banks cut off credit lines, leaving American Home without money yesterday for $300 million of mortgages it had already promised, the Melville, New York-based company said in a statement today. It anticipates that $450 million to $500 million of loans probably won't get funded today, and the lender may have to sell off its assets.

Having recently purchased a home, one of the biggest fears I had in the closing days before the closing was that my lender would somehow go belly-up. I can't imagine being in the position of some of these buyers.

At a median home price of about $225K, that's 2,000 home deals falling through due to lack of funding. It's unclear from the article, but that could just be TODAY'S American Home Mortgage fundings. Things are (sadly) getting more ugly every day.