Mortgage Mania Didn’t Grip Everyone

Published: August 4, 2007, 10:58 pm

Tags: times business finance, housing bubble, morgenson gretchen, times select

By GRETCHEN MORGENSON Published: August 5, 2007 THE seized-up United States mortgage market claimed more victims both here and abroad last week. The American Home Mortgage Investment Corporation, once a big lender, closed its doors, laying off more than 6,000 workers. In Germany, IKB Deutsche Industriebank received a $4.8 billion bailout from a government-owned group that said it would cover potential subprime losses at the bank.In a report last week, Charles Peabody, an analyst at Portales Partners, an independent research firm in New York, characterized the state of the mortgage market this way: Investors finally realized that there is such a thing as a bad mortgage loan. As a matter of fact, there is such a thing as a whole bunch of bad mortgage loans. As a result, Mr. Peabody noted, investors are no longer interested in most of the risky loans that mortgage bankers have been creating lately. Bankers can sell only the highest-grade pieces of those wonderful

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