Michael Strauss, the founder and chief executive of American Home Mortgage Investment (AHMIQ), has faced a swarm of problems in recent months. One of the biggest, fastest-growing mortgage lenders in the country, its shares had slipped from a high of $36.40 last December to $10.47 by late July as the housing crisis deepened.

On July 31, things got decidedly worse. After the Melville (N.Y.) company announced that it would delay its dividend amid growing cash woes, panicked investors fled, sending the shares tumbling $1.04 by the end of the day. Six days later, American Home Mortgage filed for bankruptcy in Delaware (see BusinessWeek.com, 7/30/07, "American Home’s Credit Crisis").

Now, could Strauss potentially face civil insider trading charges as well?

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Aug. 15 (Bloomberg) — Countrywide Financial Corp., the biggest U.S. mortgage lender, fell for the fifth consecutive day on the New York Stock Exchange after Merrill Lynch & Co. raised the possibility of bankruptcy.

“Effective insolvency'’ would result should creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash, Kenneth Bruce, a Merrill analyst in San Francisco, said in a research note today.

Shareholders shouldn’t “understate the importance of liquidity,'’ Bruce wrote. “If liquidations occur in a weak market, then it is possible for CFC to go bankrupt,'’ said Bruce, who downgraded Countrywide to “sell'’ from “buy.'’ The company trades under the ticker CFC.

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“We are sitting on a time bomb,” the mortgage analyst said — a huge increase in unconventional home loans like balloon mortgages taken out by consumers who cannot qualify for regular mortgages. The high payments, he continued, “are just beginning to come due and a lot of people who were betting interest rates would come down by now risk losing their homes because they can’t pay the debt.”

He would have given great testimony at the current Senate hearings on subprime mortgage lending. The only problem is, he said it in 1981 — when soon after several of the alternative mortgage products like those with adjustable rates and balloons first became popular.

When Senator Christopher J. Dodd, Democrat of Connecticut, gave his opening statement last week at the hearings lambasting the rise of “risky exotic and subprime mortgages,” he was actually tapping into a very old vein of suspicion against innovations in the mortgage market.

Almost every new form of mortgage lending — from adjustable-rate mortgages to home equity lines of credit to no-money-down mortgages — has tended to expand the pool of people who qualify but has also been greeted by a large number of people saying that it harms consumers and will fool people into thinking they can afford homes that they cannot.

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Late Wednesday several lenders, including Taylor Bean & Whitaker, American Brokers Conduit and Option One, announced major changes to their Alt-A guidelines by increasing the minimum required credit scores and reducing the maximum loan to value ratios on most of their programs. Below is the announcement sent by one of the lenders to all its brokers:

Alt-A Underwriting Changes

Due to rapidly deteriorating market conditions, we will be making the following adjustments to our Alt-A underwriting guidelines:Minimum FICO score of 620 for Full Doc loans

Minimum FICO score of 620 for Full Doc loans
Minimum FICO score of 640 for Full Doc investment properties
Minimum FICO score of 640 for SIVA
Max LTV/CLTV 90% for SIVA Investment property
Minimum FICO score of 680 for SIVA Investment Property
Max CLTV of 95% for SIVA and SISA doc types
Minimum FICO score of 660 for SISA
Investment properties are not an eligible occupancy for SISA
NIQ and No Doc loans will require a minimum FICO score of 720
Max LTV/CLTV 50% for No Doc
Investment properties are not an eligible occupancy for NIQ
No Doc loans only allow for primary residency
SIVA, SISA, NIQ & No Doc loans not eligible in Ohio