Last year it was subprime mortgage originators who scored triple-digit earnings increases.

This year belongs to high-loan-to-value lenders.

Mego Mortgage Corp., Atlanta, announced that revenues for the quarter ended Aug. 31 rose 142% from a year earlier, to $17 million. Loan originations increased 259%, to $179.3 million.

For the fiscal year ended Aug. 31, originations totaled $526.9 million, a 278% increase.

Since its initial public offering last November, Mego has become the second-largest publicly traded company that specializes in loans above a home's value.

Only First Plus Financial Group, Dallas, makes more high-LTV loans.

Analysts say that Mego's phenomenal growth is safe, in part because the company was squeezed for cash during the year.

"Because of their lack of capital, they've been picking and choosing loans," said Luke Smith, analyst at Chesapeake Securities in Chesapeake, Md.

A $40 million debt issue in September, placed privately by Freidman, Billings & Ramsey, has temporarily stemmed Mego's cash problems.

Prepayments continue to be within expectations, chief financial officer Jim Belter said. A 12-month-old portfolio is expected to have prepayments of 6%, he said, and that is expected to ramp up to 12% by the 18th month.

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