Subprime mortgage lender shares fall sharply
Subprime mortgage lender shares fall sharply
February 23 2007: 3:12 PM EST
CNNMoney.com
NEW YORK (Reuters) -- Subprime mortgage companies' shares plummeted on Friday, extending more than two weeks of declines and triggering broader economic concerns.
Friday's freefall was triggered after a small home lender reported a $64 million quarterly loss.
Impac Mortgage Holdings Inc. (down $0.20 to $7.38, Charts), which like other subprime lenders that make home loans to people with weak credit, posted the loss amid defaults and writedowns of mortgage holdings that generally appear to have accelerated in the fourth quarter.
"There's so much fear and loathing and panic in the subprime mortgage sector now," said Howard Shapiro, a portfolio manager at KBW Asset Management in New York, which has positions in several mortgage lenders.
Similar weakness in results has hammered shares of companies like New Century Financial Corp. (down $0.64 to $15.90, Charts) and NovaStar Financial Inc. (down $0.70 to $8.64, Charts), both of which fell again on Friday.
Impac's shares fell as much as 5.3 percent. NovaStar, which reported earnings on Tuesday, fell as much as 9 percent on Friday and have lost more than half their value this week.
Concerns about the mortgage sector hemorrhaged into Treasuries, where benchmark U.S. 10-year Treasuries rose as investors sought safer instruments.
Shares of Lehman Brothers Holdings Inc. (down $2.70 to $79.33, Charts) and Bear Stearns Cos. Inc. (down $4.91 to $161.17, Charts), investment banks perceived as having large exposure to the mortgage market, also fell.
Earlier this week, Federal Reserve Board Governor Susan Bies said that most of the mortgage market was doing fine. "It's isolated at this point," she said.
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February 23 2007: 3:12 PM EST
CNNMoney.com
NEW YORK (Reuters) -- Subprime mortgage companies' shares plummeted on Friday, extending more than two weeks of declines and triggering broader economic concerns.
Friday's freefall was triggered after a small home lender reported a $64 million quarterly loss.
Impac Mortgage Holdings Inc. (down $0.20 to $7.38, Charts), which like other subprime lenders that make home loans to people with weak credit, posted the loss amid defaults and writedowns of mortgage holdings that generally appear to have accelerated in the fourth quarter.
"There's so much fear and loathing and panic in the subprime mortgage sector now," said Howard Shapiro, a portfolio manager at KBW Asset Management in New York, which has positions in several mortgage lenders.
Similar weakness in results has hammered shares of companies like New Century Financial Corp. (down $0.64 to $15.90, Charts) and NovaStar Financial Inc. (down $0.70 to $8.64, Charts), both of which fell again on Friday.
Impac's shares fell as much as 5.3 percent. NovaStar, which reported earnings on Tuesday, fell as much as 9 percent on Friday and have lost more than half their value this week.
Concerns about the mortgage sector hemorrhaged into Treasuries, where benchmark U.S. 10-year Treasuries rose as investors sought safer instruments.
Shares of Lehman Brothers Holdings Inc. (down $2.70 to $79.33, Charts) and Bear Stearns Cos. Inc. (down $4.91 to $161.17, Charts), investment banks perceived as having large exposure to the mortgage market, also fell.
Earlier this week, Federal Reserve Board Governor Susan Bies said that most of the mortgage market was doing fine. "It's isolated at this point," she said.
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