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Strategies & Market Trends : REXI is jumping up! -- Ignore unavailable to you. Want to Upgrade?

To: Paul Tran who wrote (22)	8/24/1998 7:19:00 PM
From: Tradegod	Read Replies (1) \| Respond to of 83

I listened to the conference call and heard the right things. Hard to figure out the continued sell off toward the close. Found out that a Mass. firm "off Wall Street" questioned their booking of income on loans they assume. Ceo addressed it and felt very comfortable it was within GAAP. Apparently it goes something like this. REXI bids on a non conforming loan on a property with appraised value of 2 million, and loan of 1.5 million. They buy the loan at a discount because it's non comforming, say for 1.2 million. Now their gonna make their standard spread on the interest, but Apparently they book 300k of income based on the discount they bought the loan. I believe I heard him state that that income is spread out over the life of the loan. This would seem to be reasonable. If they are booking an upfront gain of 300k, then this would appear to inflate earnings, or at least make the quality of them look suspect. I went long the stock based on Cohen's comments and hope he didn't mislead. He seemed like a straight shooter.