Asta Funding Inc., an asset management company that buys unpaid credit card loans and tries to collect on them, reported a net loss of $79.2 million for its fiscal fourth quarter, which ended Sept. 30.

The Englewood Cliffs, N.J., company recorded impairment charges during the quarter of $137.3 million, including $53 million for the February 2007 purchase of a $6.9 billion delinquent credit card portfolio from Great Seneca Financial Corp. Asta Funding paid $300 million for the portfolio.

"A good portion of the impairments were recorded on portfolios acquired during the period of a healthier economy with a robust housing market and very low unemployment," Bob Michel, Asta Funding's chief financial officer, said last week during a conference call with analysts.

"With the slowdown in the housing market, the larger payoff of judgments that was associated with a robust housing market has been substantially reduced," he said. "People are staying in their houses longer and waiting for their value to increase. As [the] unemployment rate rose to over 10%, garnishments, which became a larger part of the collection base, began to slow down."

Asta is ranked as the No. 7 debt buyer, according to Collection & Credit Risk's 2009 industry rankings, with nearly $115.3 million in revenue from purchased debt in 2008. (Collection & Credit Risk is a SourceMedia publication.)

Net cash collections of receivables acquired for liquidation totaled $30.8 million during the quarter, down 40% from $51.3 million a year earlier.

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