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Monday, May 14, 2007

Subprime Update: "Turbulent" Is Today's Word

by Tanta on 5/14/2007 11:26:00 AM

Via Reuters:

NEW YORK, May 14 (Reuters) - Accredited Home Lenders Holding Co. shares dipped on Monday after the struggling subprime mortgage lender projected a "significant" first-quarter loss and cut 1,300 jobs, but said it ended March with more than $350 million of available cash.

In a filing late Friday with the U.S. Securities and Exchange Commission, San Diego-based Accredited Home said it cut its work force to 2,900 as of March 31 from 4,200 at year end, to slash costs amid a "turbulent mortgage industry."

Accredited Home said it made $1.9 billion of mortgage loans in the quarter, down 47 percent from $3.6 billion a year earlier. It said its cash level stemmed mainly from its $230 million term loan from Farallon Capital Management LLC. Subprime lenders lend to people with poor credit histories.

"The company's cash and liquidity appear adequate at the moment, especially in light of actual and, most likely, continued declines in origination volume as well as the elimination of approximately one-third of its work force," wrote Roth Capital Partners LLC analyst Richard Eckert.

Delinquent loans as a percentage of loans serviced more than tripled to 8.96 percent from 2.85 percent a year earlier.