First Federal Bank of California Home-Loan Modifications Pass $1.4 Billion In Most Active Quarter Yet; Loan Delinquencies Fall Sharply from Peak

http://www.businesswire.com/news/home/20091015006301/en

LOS ANGELES--(Business Wire)--
September figures show that First Federal Bank of California, a wholly owned
subsidiary of FirstFed Financial Corp. (Pink Sheets:FFED), has modified more
than $1.4 billion worth of home mortgages, enabling nearly 3,000 California
families to avert foreclosure. The Bank`s workouts continue to perform better
than those of banks nationally, fulfilling the Obama Administration`s goal for
lenders to provide affordable and sustainable mortgages to borrowers who face
hardship.

The strong loan-modification results accompany other positive financial trends
for First Federal Bank of California. Overall loan delinquencies declined
significantly as of September 30, 2009 compared to their previous peak levels.
Loans that were 30-59 days delinquent fell to $70.6 million as of September 30,
or 55% lower than the $157.5 on January 31, 2009, according to unaudited,
unconsolidated monthly results. Loans that were greater than 60 days delinquent
fell to $16.8 million, or 95% lower than the $341.3 million on February 28,
2009. Loans in foreclosure fell 38% to $281.8 million from $456.2 million on
June 30, 2009.

September capped the most active three-month period for loan modifications since
First Federal Bank of California launched its program (see table below). Nearly
900 mortgages worth some $442 million were modified in the July to September
quarter. The Bank, a Southern California community lender for 80 years, has
reached out to residential-mortgage holders and to date, has successfully
modified more than one-third of its option arm loan portfolio.

First Federal Bank of California`s early, proactive and sustained effort to
respond to its borrowers` needs has produced a pace-setting loan-modification
program. Compared to the national average, far fewer loans modified by the Bank
have defaulted as of August 31, the latest date for which there is comparative
data. Just 28.3% of the loans modified by First Federal Bank of California in
the first quarter of 2008 had become at least 30 days delinquent 12 months after
they were modified. By contrast, that figure is 65.9% for national banks and
federally regulated thrifts, according to a September report by the Office of
the Comptroller of the Currency and the Office of Thrift Supervision.

In other words, for the earliest home loans that were modified - those with the
longest track record by which to measure performance - two-thirds of the
mortgages nationally have fallen 30 days behind, while less than one-third of
First Federal Bank of California`s are similarly delinquent. Thanks to
refinements in its loan-modification program and its flexibility in working with
borrowers because the Bank holds the mortgages in its own portfolio, First
Federal Bank of California has steadily improved its success rate (see graph).

The most recent results show that the Bank modified 304 home mortgages worth
$153 million in September, nearly three times the volume of its loan
modifications in September 2008. First Federal Bank of California acted early to
offer modifications even before borrowers defaulted on their payments. Over 90%
of the loans that the Bank has modified since the program started were current
at the time they were modified. The Bank converted many adjustable-rate loans
into fixed-rate mortgages for up to 10 years and eliminated
negative-amortization provisions for modified loans. These steps have reduced
the risk of foreclosure and potential loan losses.

Date Modified Total Total Modified
Modified Balance
Loans
02/29/08 133 $ 67,047,095
03/31/08 86 $ 41,770,910
04/30/08 122 $ 57,674,168
05/31/08 68 $ 31,913,335
06/30/08 135 $ 61,669,438
07/31/08 178 $ 82,481,190
08/31/08 128 $ 55,524,834
09/30/08 122 $ 57,784,775
10/31/08 109 $ 50,748,718
11/30/08 67 $ 29,364,029
12/31/08 102 $ 52,771,594
01/31/09 79 $ 34,496,170
02/28/09 110 $ 53,989,363
03/31/09 156 $ 77,157,055
04/30/09 174 $ 85,036,389
05/31/09 132 $ 59,723,698
06/30/09 140 $ 69,526,456
07/31/09 221 $ 105,632,386
08/31/09 361 $ 182,824,246
09/30/09 304 $ 153,140,462
Total 2927 $ 1,410,276,311

Loan delinquency trends also point to reduced risk of foreclosure. Recently,
loans that were 30-59 days delinquent largely have not deteriorated to more
serious categories of delinquency in following months. They either have been
cured or they remained less than 60 days delinquent.

First Federal Bank of California, a federally chartered savings association,
operates 39 retail banking offices in Southern California. FirstFed Financial
Corp. is a savings and loan holding company.

This news release contains certain forward looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Act of 1995.
These forward looking statements are subject to various factors, many of which
are beyond the Company`s control, which could cause actual results to differ
materially from such statements. Such factors include, but are not limited to,
the general business environment, interest rate fluctuations that may affect
operating margin, changes in laws and regulations affecting the Company`s
business, the California real estate and job markets, and competitive conditions
in the business and geographic areas in which the Company conducts its business
and regulatory actions. In addition, these forward-looking statements are
subject to assumptions as to future business strategies and decisions that are
subject to change. The Company makes no guarantees or promises regarding future
results and assumes no responsibility to update such forward looking statements.

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First Federal Bank of California
Media Contact:
Steve Sugerman
310-689-7535

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