A class action lawsuit has been filed against  American Home Mortgage Investment Corp., claiming the company misled investors by failing to disclose adverse conditions in its mortgage loan portfolio—an action that later contributed to significant financial losses.

The law firm of Susman, Heffner & Hurst LLP filed the suit on behalf of investors who sustained damages after purchasing AHM common stock on or traceable to the April 30, 2007, public offering, the firm said in a press release.
The plaintiffs claim the company’s negligent behavior surfaced “when AHM issued a press release announcing its true financial condition and its inability to fund its lending obligations, AHM’s stock price plummeted to an all time low of $1.04 per share.”
In the suit, American Home Mortgage Investment is accused of failing to disclose the following information to investors.
1. The fact that it was experiencing an increasing number of loan delinquencies
2. That it failed to take adequate reserves against known or knowable future losses
3. Failed to write down on its financial statements the value of certain loans that had substantially declined
4. Failed to discuss the fact that it was becoming increasingly more difficult for AHM to sell its loans