Harbinger of wider problems
Whether American Home's demise was a product of circumstance, as its executives have maintained, or of poor risk management and strategic missteps as critics say, the company's overnight collapse is seen as a harbinger of problems for the wider mortgage market.
American Home was the first Alt-A and prime lender of its size to fail, but more than 70 mortgage companies have already fallen apart since the start of 2006, according to Bloomberg data.
"The biggest post-mortem on all of this," said Raphael Bostic, a professor at the University of Southern California and former chief economist at the Federal Reserve, "is as more and more of these institutions start to take these hits, I think it has the potential to really change accessibility to housing."