American Home Mortgage (AHM),
a real estate investment trust (REIT) that makes millions of home
loans, pays a cash distribution with over a 15 percent yield, but
the stock is on the price downside and the company could cut the
distribution.
Although AHM specializes in prime rate and near-prime loans, it
made loans that required borrowers to produce little documentation.
And many of these “stated income” loans have become
delinquent and the earnings of the company have dropped accordingly.
Be careful with this stock until its price stabilizes.
Related Articles:
Homebuilding Stocks
Mortgage
Investment REITs
Real Estate Investment
Trusts (REITs) Stocks Pay High Dividends
Posted July 4, 2007.
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