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FFIN » Topics » Recent Developments In The Mortgage Market May Affect Our Ability To Originate Loans And The Profitability Of Loans In Our Pipeline.These excerpts taken from the FFIN 10-K filed Feb 22, 2008. Recent
Developments In The Mortgage Market May Affect Our Ability To
Originate Loans And The Profitability Of Loans In Our
Pipeline.
During 2007, a combination of rising interest rates and
softening real estate prices throughout the United States
culminated in an industry-wide increase in borrowers unable to
make their mortgage payments and increased foreclosure rates.
Lenders in certain sections of the housing and mortgage markets
were forced to close or limit their operations or seek
additional capital. In response, financial institutions have
tightened their underwriting standards, limiting the
availability of sources of credit and liquidity. While we have
never been a subprime lender, recent reports of credit quality,
financial solvency and other problems among subprime lenders
have increased volatility in the price of the securities of a
broader class of financial institutions. If the subprime segment
continues to have problems in the future or credit quality
problems spread to other industry segments, including lenders
who make loans to prime credit quality borrowers, there could be
a prolonged decrease in the demand for our loans in the
secondary market, adversely affecting our earnings and
negatively impacting the price of our common stock.
Recent Developments In The Mortgage Market May Affect Our Ability To Originate Loans And The Profitability Of Loans In Our Pipeline. During 2007, a combination of rising interest rates and softening real estate prices throughout the United States culminated in an industry-wide increase in borrowers unable to make their mortgage payments and increased foreclosure rates. Lenders in certain sections of the housing and mortgage markets were forced to close or limit their operations or seek additional capital. In response, financial institutions have tightened their underwriting standards, limiting the availability of sources of credit and liquidity. While we have never been a subprime lender, recent reports of credit quality, financial solvency and other problems among subprime lenders have increased volatility in the price of the securities of a broader class of financial institutions. If the subprime segment continues to have problems in the future or credit quality problems spread to other industry segments, including lenders who make loans to prime credit quality borrowers, there could be a prolonged decrease in the demand for our loans in the secondary market, adversely affecting our earnings and negatively impacting the price of our common stock. | EXCERPTS ON THIS PAGE:
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