Subprime lender Mego Mortgage Corp. may have to file for bankruptcy due to higher-than-expected loan defaults, and plummeting loan volume.

In a filing with the Securities and Exchange Commission Thursday, Mego said it lost $32.5 million in the six months ending Feb. 28, $12.3 more than previously reported. The restatement "raises serious doubt about the company's ability to continue" the filing said.

Mego said it no longer complies with the covenants of its credit lines.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.