Talk about mortgage blues. About 7000 people are unemployed, and the threat of a $1 million fine, coupled with a cease and desist order would certainly do it. When state banking regulators step in to drop the hammer it is a bad day. Here’s what happened Friday, August 3:
State banking regulators ordered American Home Mortgage Corp. Friday to cease all new lending in Connecticut and threatened it with a $1 million fine, after the Long Island-based company abruptly laid off about 6,250 people nationwide, roughly 90 percent of its workforce. American’s parent company, American Home Mortgage Investment Corp., said Thursday that it had stopped taking mortgage applications and would lay off most of its workers Friday. It kept about 750 people out of more than 7,000.