From Newsday, news of quiet trouble at American Home:

American Home Mortgage Investment Corp. … has laid off hundreds of workers without notice or even time to clear out their desks, current and former employees said this month. … as things turned south for many housing-related businesses, American Home has offered what one analyst called “overly rosy” earnings predictions … … several current and former employees, speaking on condition of anonymity for fear of reprisal, said there was a total of about 200 layoffs.

With AHM primarily an Alt-A mortgage operation, the natural question here is where the Alt-A market is ultimately headed. The AP weighed in earlier today on the issue:

Rating agencies are likely to review bonds backed alt-A mortgages in the near future, said Scott Valentin, managing director of specialty finance research at Friedman, Billings, Ramsey & Co. “It probably will not be as bad as subprime, but there will likely be downgrades” among alt-A-backed mortgage securities, Valentin said.

Valentin certainly doesn’t sound too confident, and I can’t blame him. The future of Alt-A was also on the mind of Mathew Padilla at the Mortgage Insider blog today, who pointed to an S&P report I wrote about late last month:

The percentage of Alt-A loans that are 90 or more days delinquent (including loans that were foreclosed and represent real estate-owned assets, are in foreclosure, or are in bankruptcy) for the 2006 vintage is 2.5 times higher than the previous year’s figure and more than 4 times that of the 2004 deals with the same amount of seasoning …

It’s tough to be confident when Alt-A defaults are reaching what S&P is already calling “disconcerting” levels — remember what I said earlier: it’s all about the underlying collateral.