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.

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