Downey Sees NPAs Continue Quick Ascent
Downey Financial Corp. reported last week that non-performing assets at the option ARM specialist have continued to climb quickly, in spite of the lender's efforts to restructure 'at-risk' borrowers ahead of possible delinquency and/or default. Total NPAs reached 9.14 percent, a rise of 137 basis points in just one quarter; non-performing assets are now roughly twelve times greater that the 0.78 percent recorded one year earlier. Rising borrower defaults led Downey to report a fourth quarter loss of nearly $109 million, although the lender has been moving aggressively to restructure its outstanding payment-option mortgages into more traditional mortgages. Downey's auditors, KPMG, in January forced the lender to report its efforts as troubled debt restructurings -- a move that bumped up overall non-performing assets. http://www.downeysavings.com. Disclosure: The author held no positions in DSL at the time this story was published.