Quarterly production sank at ECC Capital Corp.
The real estate investment trust announced Tuesday first quarter production totaled $1.7 billion, sinking from the fourth quarter's level of $4.2 billion and from $2.2 billion a year earlier.
Wholesale loans reportedly accounted for 98 percent of the latest period's production.
The decline in fundings "reflects competitive market conditions as well as ECC Capital's efforts to focus on originating loans that should provide for improved gain on sale execution," the Irvine, Calif.-based company said.
ECC shifted focus to producing loans with credit characteristics it believes will generate better returns in the secondary markets after experiencing a significant reduction in whole loan sales pricing in the fourth quarter, according to the announcement.
For the prior quarter ended Dec. 31, 2005, ECC reported a net loss of $49.8 million and, for all of 2005, losses of $64.1 million.
"In response to market conditions, our liquidity position and 2005 operating results, we initiated a restructuring plan that is designed to improve the value of our loan production and improve our operating efficiency," said ECC President and Co-Chief Executive Shabi Asghar in the announcement.
Such a plan includes the elimination of 170 employees, significant compensation reductions for executives, and consideration of converting from a REIT to a C Corporation.
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