Contifinancial reported a loss of $58.8 million for its third fiscal quarter, including $44.2 million in pretax charges related to writedowns and other costs related to the company's downsizing.
Conti said its loss for the nine months ended Dec. 31 reached $167.0 million. The subprime specialist earned $35.1 million in the third quarter of its previous fiscal year, and $96.9 million for the first nine months of that year.
"We are disappointed with our third fiscal quarter results, but are encouraged by the implementation of a number of cost-cutting measures resulting from restructuring in our businesses," said James E. Moore, president and chief executive officer. He said he was encouraged by improving whole loan sales opportunities and a reduction of spreads in the bond markets.
The company said it reduced its wholesale home equity and residential mortgage loan originations to $1.8 billion in the quarter that ended Dec. 31, from $2.5 in the previous quarter, in order to lower the company's financing needs.
The company said it plans to reduce wholesale originations by Contimortgage/ContiWest to nearly 40% of its total originations.
During the quarter, Contifinancial completed $1.1 billion in securitizations and registered whole-loan sales of $1.2 billion. To achieve better cash flow, the company said it would focus on retail origination and small-broker channels while reducing loan purchases from wholesale originators.