Origen Financial Announces Fourth Quarter and Full Year 2007 Results and Actions...

Origen Financial Announces Fourth Quarter and Full Year 2007 Results and
Actions to Respond to Credit Market Conditions

SOUTHFIELD, Mich., March 13 /PRNewswire-FirstCall/ -- Origen Financial,
Inc. (Nasdaq: ORGN), a real estate investment trust that is in the business of
originating and servicing manufactured housing loans, today announced a net
loss of $39.1 million for the quarter ended December 31, 2007, representing
$1.54 per share on a fully-diluted basis, as compared to net income of
$2.0 million, or $0.08 per share on a fully-diluted basis for the quarter
ended December 31, 2006. Net loss for the full year of 2007 was $31.8 million
or $1.26 per fully-diluted share, as compared to net income of $7.0 million,
or $0.28 per fully-diluted share for the full year of 2006. Origen's Board of
Directors did not declare a common stock dividend payment for the fourth
quarter of 2007. Due to the nature of the items which created the loss for
2007, REIT net taxable income for 2007 was not affected, and there will be no
re-characterization of dividends reported to stockholders for the tax year
2007.
Recent and current conditions in the credit markets have adversely
impacted Origen's business and financial condition. Subsequent to Origen's
annual evaluation of asset impairment at December 31, 2007, the company
determined that its recorded goodwill was fully impaired. The extended decline
of the company's share price resulting from turmoil in the credit markets led
Origen to record a non-cash goodwill impairment charge in the fourth quarter
of $32.3 million. In addition, Origen had credit facilities structured as
repurchase agreements backed by four asset-backed bonds. In February 2008,
Origen sold one of its asset-backed bonds to eliminate pressure from its
lender. The proceeds from the sale of this bond retired all debt under
repurchase agreements secured by this bond and three others that the company
continues to hold. Origen consequently re-characterized the sold bond as
available for sale as of December 2007 and recognized an other-than-temporary
impairment charge of $9.2 million. Without the non-cash impairment charge for
goodwill and the sale of the bond, Origen earned $9.7 million for the 2007
year.
Current Market Conditions and their Effect on Origen's Business
Origen's business model is dependent on the availability of credit, both
for the funding of newly originated loans and for the periodic securitization
of pools of loans that have been originated and funded by short-term
borrowings from warehouse lenders. The securitization process permits Origen
to sell bonds secured by the loans it has originated. The proceeds from the
bond sales are used to pay off the warehouse lenders and recharge the
availability of funding for newly originated loans. If warehouse funding is
not available, or is available only on terms that do not permit Origen to
profit from loan origination, Origen's origination of loans only can be
continued at a loss. If there is no market for securitization at rates of
interest and leverage levels acceptable to Origen, Origen's only alternative
for satisfying its obligations under its warehouse line is to sell the
manufactured housing loans to a purchaser. If purchasers are unwilling to pay
at least the full amount advanced to borrowers plus all related fees and
costs, sales of loans are not profitable for Origen.
During 2007, the credit markets that Origen depends upon for warehouse
lending for originations and for securitization of its originated loans, as
well as the whole loan market for acquisition of loans originated by Origen,
deteriorated. This situation began with problems in the sub-prime loan market
and subsequently has had the same effect on lenders and investors in asset
classes other than sub-prime mortgages, such as Origen's manufactured housing
loans.
Despite actions by the Federal Reserve Bank to lower interest rates and
increase liquidity, uncertainty among lenders and investors has continued to
reduce liquidity, drive up the cost of lending and drive down the value of
assets in these markets relied upon by Origen. The specific effects are that
banks and other lenders have reported large losses, have demanded that
borrowers reduce the credit exposure to these assets resulting in "margin
calls" or reductions in borrowing availability, and have caused massive sales
of underlying assets that collateralize the loans. The consequence of these
sales has been further downward pressure on market values of the underlying
assets, such as Origen's manufactured housing loans, despite the continued
high intrinsic quality of Origen's loans in terms of borrower creditworthiness
and low rates of delinquencies, defaults and repossessions.
For Origen, the effect of these conditions has been as follows:

-- The company's stock price has steadily declined to a point where it is
well below its tangible net book value. As a consequence, the company
recorded a non-cash impairment charge, writing off its entire goodwill
of $32.3 million in December 2007.
-- In February 2008, to satisfy its primary lender, the company sold an
asset-backed bond for $22.5 million, in order to fully pay off
$19.6 million of obligations secured by this bond and three others that
the company continues to hold. Sale of this bond resulted in the
company recording an asset impairment charge in 2007 of $9.2 million.
-- Origen's warehouse facility, which has an outstanding loan balance of
approximately $146.4 million, expires on March 14, 2008. As Origen
depends on securitization of its loans to pay down its warehouse line,
the absence of a profitable financing in the securitization market
requires that Origen sell its loans that are currently on its warehouse
line in order to pay off the warehouse line.
-- The absence of a profitable exit in the securitization market and
reduced pricing in the whole loan market requires that Origen suspend
originating loans for its own account until these markets recover.
Origen will continue to provide its third-party loan origination
services.
-- Origen has approximately $50 million outstanding under its supplemental
advance residual facility that expires on March 14, 2008. Origen's
lender under this facility has agreed to extend the due date of this
facility until June 13, 2008, subject to certain conditions.

The Board of Directors is assessing the best possible courses of action
for the company to realize the highest value for its stockholders, including
(a) continuation of the company's business, currently pared down to its
third-party fee business and management of its $1 billion loan portfolio;
(b) a possible sale of certain company assets; or (c) the possible sale of the
entire company.
Despite exceptional operating results, excluding impairments, and
continued outstanding credit performance on Origen's loan portfolio during the
last year, the specific actions noted above were taken by the company as a
consequence of the described market conditions. The actions do not reflect on
the credit performance or long-term realizable value of Origen's loan
portfolio, which in management's opinion continues to remain very high.
Sale of Un-securitized Loans
The company has been in discussions and expects to sell its un-securitized
loans soon and will use most of the proceeds to pay off its warehouse
facility. The loan sale is subject to final agreement and customary closing
conditions.
Continuing Operations
As noted above, Origen has determined to suspend portfolio loan
originations and has taken steps to right-size its workforce. At the present
time, Origen retains and operates its third-party loan origination business
and management of its loan portfolio.
Ronald A. Klein, Origen's Chief Executive Officer, stated, "Despite the
extreme market difficulties we faced last year, we were nevertheless able to
increase our overall originations, complete two successful securitizations,
and our portfolio performance has been exceptional. During a period of extreme
turmoil in the credit markets, we increased our already high credit standards.
Additionally, our third party originations increased substantially over the
prior year. Most importantly, the credit performance of our loan portfolio
continues to exceed our expectations. In 2007, we had record low default
rates, record low charge-offs, record low delinquencies, and record high
recovery rates. This loan portfolio continues to perform at record levels to
date notwithstanding the general turmoil in the housing market. We continue to
work tirelessly to protect and maximize stockholder value as we examine our
alternatives."
"We have been negatively impacted by the global credit and liquidity
crunch generally attributed to have started with sub-prime mortgage defaults
and foreclosures occasioned by falling housing values and lenient lending
practices. Credit tightening and resulting asset repricing has impacted
companies like Origen that had no direct exposure to sub-prime mortgage loans.
We have been subjected to margin calls and market value adjustments on our
credit facilities despite our continued excellent loan performance. The
ongoing uncertainty and credit stress in the housing and capital markets, and
the resulting lack of liquidity have curtailed access to the securitization
market. Further securitization financings of our loans have effectively become
unavailable to us on a profitable basis. In the end, our management and Board
had no practical choice but to suspend funding new loans until market
conditions allow us to earn a profit from those activities."
"Despite our decision to sell our un-securitized loans, the company
continues to hold assets believed by management to have significant value. Our
Board and management continue to strive to maximize the value of these assets
and operations for our stockholders."
Earnings Call and Webcast
A conference call and webcast have been scheduled for March 14, 2008, at
11:00 a.m. Eastern Time to discuss fourth quarter and year-end results and
current operations. The call may be accessed on Origen's web site at
www.origenfinancial.com or by dialing 877-419-6590. A replay will be
available through March 24, 2008 by dialing 888-203-1112 passcode 3845644. You
may also access the replay on Origen's website for 90 days after the call.
Forward-Looking Statements
This press release contains various "forward-looking statements" within
the meaning of the Securities Act of 1933 and the Securities Exchange Act of
1934, and Origen intends that such forward-looking statements will be subject
to the safe harbors created thereby. The words "will," "may," "could,"
"expect," "anticipate," "believes," "intends," "should," "plans," "estimates,"
"approximate" and similar expressions identify these forward-looking
statements. These forward-looking statements reflect Origen's current views
with respect to future events and financial performance, but involve known and
unknown risks and uncertainties, both general and specific to the matters
discussed in this press release. These risks and uncertainties may cause
Origen's actual results to be materially different from any future results
expressed or implied by such forward-looking statements. Such risks and
uncertainties include, among others, the foregoing assumptions and those risks
referenced under the headings entitled "Factors That May Affect Future
Results" or "Risk Factors" contained in Origen's filings with the Securities
and Exchange Commission. The forward-looking statements contained in this
press release speak only as of the date hereof and Origen expressly disclaims
any obligation to provide public updates, revisions or amendments to any
forward-looking statements made herein to reflect changes in Origen's
expectations or future events.
ORGN-E,ORGN-D,ORGN-G
About Origen Financial, Inc.
Origen is an internally managed and internally advised company that has
elected to be taxed as a real estate investment trust. Origen is based in
Southfield, Michigan, with significant operations in Ft. Worth, Texas.
For more information about Origen, please visit
www.origenfinancial.com.

Financial Tables Follow ...

ORIGEN FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except for share data)

ASSETS

(Unaudited)
December 31, December 31,
2007 2006
Assets
Cash and Equivalents $10,791 $2,566
Restricted Cash 16,290 15,412
Investment Securities 32,393 41,538
Loans Receivable-Net 1,193,916 950,226
Servicing Advances 6,298 7,741
Servicing Rights 2,146 2,508
Premises & Equipment 2,974 3,513
Repossessed Houses 4,981 3,046
Goodwill - 32,277
Other Assets 14,412 14,240
Total Assets $1,284,201 $1,073,067

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Warehouse Financing $173,072 $131,520
Securitization Financing 884,650 685,013
Repurchase Agreements 17,653 23,582
Note Payable 14,593 2,185
Other Liabilities 45,848 26,303
Total Liabilities 1,135,816 868,603

Equity 148,385 204,464

Total Liabilities and Equity $1,284,201 $1,073,067

ORIGEN FINANCIAL, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in thousands, except for share data)

Twelve Months Ended
(Unaudited)
December 31, December 31, Increase
2007 2006 (Decrease)
Interest Income
Total Interest Income $92,127 $74,295 $17,832
Total Interest Expense 59,758 43,498 16,260
Net Interest Income Before Loan
Losses and Impairment 32,369 30,797 1,572
Provision for Loan Losses 8,739 7,069 1,670
Impairment of Purchased Loan
Pool - 485 (485)
Net Interest Income After Loan
Losses and Impairment 23,630 23,243 387
Non-interest Income 22,040 17,787 4,253
Non-interest Expenses:
Total Personnel 24,449 23,847 602
Total Loan Origination &
Servicing 1,985 1,619 366
Goodwill Impairment 32,277 - 32,277
Investment Impairment 9,179 114 9,065
Total Other Operating 9,487 8,501 986
Total Non-interest Expenses 77,377 34,081 43,296
Net Income (Loss) Before Income
Taxes and Before Cumulative
Effect of Change in Accounting
Principle (31,707) 6,949 (38,656)
Income Tax Expense 60 24 36
Net Income (Loss) Before
Cumulative Effect of Change
in Accounting Principle (31,767) 6,925 (38,692)
Cumulative Effect of Change in
Accounting Principle - 46 (46)
Net Income (Loss) (31,767) 6,971 (38,646)
Weighted Average Common
Shares Outstanding, Basic 25,316,278 25,125,472 190,806
Weighted Average Common
Shares Outstanding, Diluted 25,316,278 25,181,654 134,624
Earnings Per Share on Basic
Average Shares Outstanding $(1.26) $0.28 $(1.54)
Earnings Per Share on Diluted
Average Shares Outstanding $(1.26) $0.28 $(1.54)

ORIGEN FINANCIAL, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in thousands, except for share data)
(Unaudited)

Quarter Ended

December 31, December 31, Increase
2007 2006 (Decrease)
Interest Income
Total Interest Income $25,064 $20,223 $4,841
Total Interest Expense 17,121 12,170 4,951
Net Interest Income Before Losses
and Impairment 7,943 8,053 (110)
Provision for Loan Losses 2,954 2,145 809
Impairment of Purchased Loan
Pool - 485 (485)
Net Interest Income After Losses
and Impairment 4,989 5,423 (434)
Non-interest Income 6,112 5,037 1,075
Non-interest Expenses:
Total Personnel 5,586 5,861 (275)
Total Loan Origination &
Servicing 531 505 26
Goodwill Impairment 32,277 - 32,277
Investment Impairment 9,179 - 9,179
Total Other Operating 2,556 2,037 519
Total Non-interest Expenses 50,129 8,403 41,726
Net Income Before Income Taxes (39,028) 2,057 (41,085)
Income Tax Expense 103 24 79
Net Income $(39,131) $2,033 $(41,164)
Weighted Average Common
Shares Outstanding, Basic 25,395,205 25,203,558 191,647
Weighted Average Common
Shares Outstanding, Diluted 25,395,205 25,203,558 191,647
Earnings Per Share on Basic
Average Shares Outstanding $(1.54) $0.08 $(1.62)
Earnings Per Share on Diluted
Average Shares Outstanding $(1.54) $0.08 $(1.62)

SOURCE Origen Financial, Inc.

W. Anderson Geater, Chief Financial Officer of Origen Financial, Inc.,
1-866-4-ORIGEN; or Leslie Loyet of Financial Relations Board, +1-312-640-6672,
lloyet@frbir.com