Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (28410)	12/9/2007 8:27:24 PM
From: Madharry	Respond to of 78758

Just saw this on DFC- Not a good thing. Can't say I saw it coming either. Managed to dodge a bullet on this one. AN FRANCISCO (MarketWatch) -- Delta Financial Corp. said on Thursday that it plans to file for bankruptcy protection, becoming the latest mortgage lender to succumb to the subprime crisis that's swept the industry this year. Delta shares slumped 89% to close at 19 cents. The stock changed hands for $10 at the beginning of 2007, before delinquencies and foreclosures on subprime mortgages surged, triggering a global credit crisis. Delta (DFC: delta financial corp com News, chart, profile, more Last: 0.20+0.01+5.29% 4:00pm 12/07/2007 Delayed quote data Add to portfolio Analyst Create alert Insider Discuss Financials Sponsored by: DFC 0.20, +0.01, +5.3%) announced last month that it was getting help from hedge fund firm Angelo Gordon & Co., but that agreement depended on the company selling roughly $500 million of loans on to other investors in a securitization, or arranging other financing for the loans. See full story. On Thursday, Delta said it couldn't complete the securitization. Warehouse lenders, which provided short-term financing for Delta's loans before they're securitized, have now told the company it has defaulted. The deal with Angelo Gordon is now off and Delta said it will stop taking new mortgage applications and file for bankruptcy protection from its creditors. Delta offered mortgages to subprime, or less creditworthy, borrowers. However, the company focused on fixed-rate loans, rather than more exotic adjustable-rate products that have triggered many of the delinquencies and foreclosures this year. However, the company relies a lot on securitization -- packaging up and selling off the home loans it's offered as mortgage-backed securities. But the secondary mortgage market has been in turmoil since the summer, making that process much more difficult.