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The Colour

Alt-a The New Sub-prime

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http://www.nytimes.com/2007/07/17/business...rtner=BREITBART

Alliance Bancorp, a residential mortgage lender based in Brisbane, Calif., has filed for Chapter 7 bankruptcy and will liquidate its assets.

The company listed assets and debts of more than $100 million each in its bankruptcy petition, which was filed Friday in Delaware.

In a Chapter 7 case, a trustee is appointed to liquidate a company’s assets. It differs from Chapter 11, which allows a company to protect itself from creditors and reorganize through a bankruptcy court.

Alliance could not be reached to comment. A letter posted on the company’s Web site said Alliance shut its doors Friday.

“Unfortunately the latest market was more than we were able to overcome,” the chief executive, Lisa Duehring, says in the letter. “We have exhausted our resources and do not have the means to move forward. Therefore, it is with great sadness that I announce that we have ceased operations as of today, July 13th.”

Alliance Bancorp, formerly the United Financial Mortgage Corporation, specialized in lending to so-called Alt-A borrowers: mortgage borrowers with credit between those of prime and subprime borrowers.

Looks like the contagion is spreading from the bottom feeders up the food chain.

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http://www.nytimes.com/2007/07/17/business...rtner=BREITBART

Looks like the contagion is spreading from the bottom feeders up the food chain.

With lenders going bankrupt with a small fall in house prices, it just indicates how much extreme leverage has been used.

I wonder what happens when we get a few years of falls. :o

VMR.

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With lenders going bankrupt with a small fall in house prices, it just indicates how much extreme leverage has been used.

I wonder what happens when we get a few years of falls. :o

VMR.

I bet alot of "Prime" borrowers would start defaulting on their huge mortages.

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