Accredited Home loss three times larger than view
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NEW YORK, Feb 14 (Reuters) - Accredited Home Lenders Holding Co. LEND.O reported a quarterly loss three times larger than Wall Street expected as more homeowners defaulted on mortgages.
The net loss for the San Diego-based subprime mortgage lender, which makes loans to Americans with poor credit histories, totaled $37.8 million, or $1.49 per share, compared with a year-earlier profit of $43.3 million, or $1.96.
Analysts polled by Reuters Estimates on average forecast a loss of 48 cents per share.
Chief Executive James Konrath called Accredited's results "dissatisfying," citing a "difficult credit environment." Accredited bought Los Angeles' Aames Investment Corp. on Oct. 1. Accredited shares were down 20 cents at $25.02 in morning trading on the Nasdaq, after earlier falling to $22.90.
Subprime lenders are being battered by lower volumes, narrow margins and rising defaults. As home price appreciation slows, many borrowers are finding it more difficult to refinance adjustable-rate loans as rates reset higher.
Accredited said on Wednesday it set aside $42 million more reserves at year-end than in September because delinquencies are rising, and investors are forcing it to buy back more soured loans.
Lending volumes also declined, as mortgage originations fell 18 percent to $3.87 billion.
The company will not issue a 2007 earnings forecast, yet said market turbulence will persist through the year's first half. It expects loan volume to decline and origination costs to rise in the first quarter from the fourth quarter.
Earlier this week, ResMae Mortgage Corp., a Brea, California, subprime lender, filed for Chapter 11 bankruptcy protection. Two other big subprime lenders, Mortgage Lenders Network USA Inc. and Ownit Mortgage Solutions Inc., have also sought protection from creditors since late December.
Accredited shares began the year at $27.35, and through Tuesday had fallen 58 percent from their 52-week high of $60.13 set last May 11.
(Additional reporting by Dan Wilchins)
((Reporting by Jonathan Stempel, editing by Dave Zimmerman; Reuters Messaging: jon.stempel.reuters.com@reuters.net, 646 223 6317)) Keywords: ACCREDITED RESULTS/
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