American Home Mortgage Investment Corp., once a significant player in the subprime lending market, has filed for Chapter 11 bankruptcy protection. The filing marks a dramatic fall for the company, which had been struggling to stay afloat amid the ongoing turmoil in the mortgage industry.

The company’s collapse stems from its inability to fund its mortgage obligations. A liquidity crisis, triggered by margin calls from its lenders, ultimately forced the company to seek bankruptcy protection. The company has listed assets of $1 billion to $10 billion and liabilities in the same range.

The bankruptcy filing underscores the escalating problems within the subprime mortgage sector. Rising foreclosure rates and increasing investor concerns have made it increasingly difficult for subprime lenders to operate profitably.

American Home Mortgage’s demise follows similar struggles faced by other subprime lenders in recent months. The ripple effects of these failures are being felt throughout the broader housing market.

The company’s future remains uncertain, but the bankruptcy filing will allow it to reorganize its finances and potentially restructure its operations. However, the long-term outlook for the company, and the subprime mortgage market as a whole, remains clouded by uncertainty.