Aames Financial Corp. said Tuesday that loan writedowns spawned a $195.7 million loss for the quarter ended Dec. 31.
The subprime lender also said it expects a loss for the quarter ending March 31.
"Extraordinarily negative market conditions" forced the company to write down the value of loans on its books by $192 million, chief executive Cary Thompson said. The company could not securitize the loans, he said, because demand for asset-backed securities was weak and is likely to remain so.
The company also said it has replaced its auditor, PricewaterhouseCoopers, with Ernst & Young, and will adopt the "cash out" method of accounting, which prohibits it from forecasting profits.