Opteum to Exit Conduit and Wholesale Lending Business
20 Avril 2007 - 1:30PM
Business Wire
Opteum Inc. (NYSE:OPX) (�Opteum� or the �Company�), a real estate
investment trust (�REIT�) that operates an integrated
mortgage-related investment portfolio and mortgage origination
platform, today announced that its subsidiary, Opteum Financial
Services, LLC (�OFS�), intends to exit its Conduit and Wholesale
mortgage loan origination businesses. OFS has ceased accepting new
applications in each of these origination channels, effective
immediately. These actions are due primarily to the deterioration
in the secondary market for closed mortgage loans and continuing
weakness in consumer demand for mortgage products and services.
�Late last year, we announced that Citigroup Global Markets Realty
Corp. had partnered with us to drive profitable growth at OFS and
that, with lower funding costs and even greater access to capital,
OFS was well positioned to profitably increase its market share as
it leveraged its multi-channel mortgage origination platform,� said
Jeffrey J. Zimmer, Chairman, President and Chief Executive Officer
of Opteum Inc. �In the last month or so, however, the secondary
market for mortgage loans has experienced significant distress and
substantially increased volatility that was initially precipitated
by lax underwriting standards, early payment defaults and high
delinquency rates involving subprime mortgages and concerns over
the general state of the U.S. housing market. �Recently, some
secondary market investors in closed mortgage loans have changed
their terms and have delayed settling whole loan trades involving
certain Alt-A mortgage products. This has forced OFS to re-market
loans in respect of which it believed it had already obtained
purchasing commitments, and has resulted in an estimated $22
million pre-tax loss associated with mortgage loans originated by
OFS. This loss will be reflected in the Company�s first quarter
results. Because we believe that the current adverse market
environment may continue in coming quarters, we intend to exit the
Conduit and Wholesale mortgage origination businesses,� Mr. Zimmer
continued. OFS continues to originate high-quality loans through
its network of 230 retail loan professionals located in 24 offices
throughout Georgia, Florida, Illinois, New Jersey and
Massachusetts. Additionally, the Company�s $2.9 billion REIT
portfolio today consists entirely of Ginnie Mae, Fannie Mae and
Freddie Mac agency securities. For further information, please
refer to the Company�s filings with the Securities and Exchange
Commission. These filings are available on the Company�s website at
www.opteum.com under the �Investor Information� page and also may
be obtained at www.sec.gov. About Opteum Opteum Inc. is a REIT,
which operates an integrated mortgage-related investment portfolio
and mortgage origination platform. The REIT invests primarily in,
but is not limited to, residential mortgage-related securities
issued by the Federal National Mortgage Association (Fannie Mae),
the Federal Home Loan Mortgage Corporation (Freddie Mac) and the
Government National Mortgage Association (Ginnie Mae). It attempts
to earn returns on the spread between the yield on its assets and
its costs, including the interest expense on the funds it borrows.
Opteum's mortgage origination platform, Opteum Financial Services,
LLC, originates, buys, sells, and services residential mortgages
from offices throughout the United States and operates as a taxable
REIT subsidiary. Statements herein relating to matters that are not
historical facts are forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. The reader is
cautioned that such forward-looking statements are based on
information available at the time and on management's good faith
belief with respect to future events, and are subject to risks and
uncertainties that could cause actual performance or results to
differ materially from those expressed in such forward-looking
statements. Important factors that could cause such differences are
described in Opteum Inc.'s filings with the Securities and Exchange
Commission, including Opteum Inc.'s most recent Annual Report on
Form 10-K or Quarterly Report on Form 10-Q. Opteum Inc. assumes no
obligation to update forward-looking statements to reflect
subsequent results, changes in assumptions or changes in other
factors affecting forward-looking statements.
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