First Alliance Corp. said it would take a $4.5 million writedown in the second quarter to cover accelerated prepayment rates.
The company's constant prepayment rate for its adjustable mortgages increased 20% during the second quarter, to about half the portfolio.
First Alliance is one of a string of subprime lenders that have taken writedowns in the past nine months to cover unexpected refinancings. Increased competition in the industry is to blame, companies say.
First Alliance also said Ed Summers, vice president and general counsel, and John Michel, vice president of finance, had resigned effective June 30 and June 26, respectively.
Mr. Summers, who left to take a post at a manufacturer, will be succeeded by Richard Taylor, a lawyer with 19 years of thrift and mortgage institution experience.
Mr. Michel left to become vice president of strategic planning at Bank Plus Corp. His post and that of chief financial officer Mark Mason, who left this year, have not yet been filled, the company said.