August 2, 2007 (LPAC)--Accredited Home Lenders Holding Company, which specializes in subprime mortgages, said that if mortgage markets don't improve, they will follow other subprime mortgage companies into bankruptcy. Their announcement led to a 35% collapse of their stock today. Accredited states that Wall Street firms and banks that finance their operations, including Goldman Sachs and Merrill Lynch, are demanding more collateral to cover potential losses, and additional margin calls or a decision by creditors to cut off funds may force them out of business, according to a Bloomberg wire.

It is of note that Accredited Home Lenders is saying this in light of the fact that they agreed to be acquired by buyout firm Lone Star Funds in June of this year. Accredited said that they intend to close the deal with Lone Star this current quarter, but with hedge funds finding their sources of liquidity drying up, this could fail, reported the Wall Street Journal, which would assure the collapse of the firm.