Origen Financial Announces Final Fourth Quarter and Full Year 2008 Results

SOUTHFIELD, Mich., March 25  /PRNewswire-FirstCall/ -- Origen Financial, Inc. (Pink Sheets: ORGN), a real estate investment trust that manages residual interests in securitized manufactured housing loan portfolios, today announced a net loss of $4.4 million, or $0.17 per share, for the quarter ended December 31, 2008, as compared to a net loss of $39.1 million, or $1.54 cents per share, for the fourth quarter of 2007.  A net loss of $35.4 million, or $1.38 per share was realized for the full year 2008 versus a net loss of $31.8 million or $1.26 per share for the full year of 2007. The fourth quarter and full year net loss for 2007 included a non-cash goodwill write-off of $32.3 million.  Origen's Board of Directors did not declare a common stock dividend payment for the fourth quarter of 2008.

The fourth quarter 2008 provision for loan losses was $6.7 million versus $3.0 million for the prior year quarter, an increase of 123 percent.  This increase reflects the impact of overall economic conditions, including the rising unemployment rate and the deterioration of the housing market, which has negatively impacted recovery rates on the disposition of repossessed and foreclosed properties.  Also, the aging of our loan portfolio as loans begin to enter the peak years for delinquencies and defaults has increased the level of loan loss reserves needed, and has resulted in increased loan loss provisions.  The loan loss provision for the full year of 2008 was $17.7 million, as compared to $8.7 million for 2007, an increase of 103 percent.

Contributing factors to the 2008 net loss included a $25.5 million loss on the sale of un-securitized loans and related hedge termination costs and approximately $10.7 million of costs, including accrued expenses, relating to the execution of the Asset Management and Disposition Plan ("the Plan") as approved by our shareholders in June 2008 and detailed in our proxy filing dated May 22, 2008.  These costs included severance payments, change of control costs, losses on fixed asset disposition and the acceleration of non-cash stock compensation expense.

Cash expenses for the initial period of the Plan, July 1, 2008 through December 31, 2008, totaled $8.7 million versus projected cash expenses for the Plan period of $10.5 million.  Cash expenses encompass interest expenses paid on secured related party debt and the cash costs to manage the ongoing operations of the company, including all personnel costs.  Personnel costs include amounts paid for severance and employee retention. The actual balance of secured related-party debt at December 31, 2008 was $30.0 million compared to a projected Plan balance of $36.0 million, reflecting earlier than anticipated pay down of such debt.

As previously reported, we ceased originating loans for own account in March 2008, sold our loan servicing-related assets effective July 1, 2008 and sold our loan origination platform and insurance operations effective July 31, 2008.  Our only remaining business is the management of retained interests in our securitized loan portfolios.  In December 2008, we voluntarily delisted our common stock from the NASDAQ Global Market and also deregistered the stock under the Securities Exchange Act of 1934.  Since December 31, 2007, we have reduced our workforce by 89 per cent and have dramatically reduced the operating and overhead costs associated with on-going operations.  Additional workforce reductions are scheduled for the second quarter of 2009.

Ronald A. Klein, Origen's Chief Executive Officer, stated, "Our loan portfolio performance continued to be strong in the fourth quarter of 2008, and that performance has continued so far into 2009.  We are especially pleased with this performance in light of the continuing decline in housing prices and the increase in the unemployment rate.  Our 30-day+ delinquency rate increased moderately in the fourth quarter, but delinquencies have declined consecutively for the past three months with February's 30+ rate ending at 2.14 percent."

Mr. Klein added, "As we have previously stated, our portfolio is now an aging static pool which is approaching its peak default years.  Accordingly, we expect to see increases in both delinquencies and defaults.  In the current economic environment we expect our borrowers to face challenges especially if the unemployment rate continues to increase.  Nevertheless, our portfolio continues to perform well due to our solid underwriting and the resulting cash flows have allowed us to pay down our secured related party debt more quickly than anticipated by our plan."

Earnings Call and Webcast

A conference call and webcast have been scheduled for March 26, 2009, at 11:00 a.m. Eastern Time to discuss fourth quarter and year-end results and current operations.  The call may be accessed on Origen's web site at http://www.origenfinancial.com/ or by dialing 877-719-9786.  A replay will be available through April 3, 2009 by dialing 888-203-1112 passcode 3847193.  You may also access the replay on Origen's website for 90 days following the event.

Forward-Looking Statements

This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and Origen intends that such forward-looking statements will be subject to the safe harbors created thereby. The words "will," "may," "could," "expect," "anticipate," "believes," "intends," "should," "plans," "estimates," "approximate" and similar expressions identify these forward-looking statements. These forward-looking statements reflect Origen's current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this press release. These risks and uncertainties may cause Origen's actual results to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the foregoing assumptions and those risks referenced under the headings entitled "Factors That May Affect Future Results" or "Risk Factors" contained in Origen's filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release speak only as of the date hereof and Origen expressly disclaims any obligation to provide public updates, revisions or amendments to any forward- looking statements made herein to reflect changes in Origen's expectations or future events.

  ORGN-E,ORGN-D,ORGN-G

  About Origen Financial, Inc.



Origen is an internally managed and internally advised company that has elected to be taxed as a real estate investment trust. Origen is based in Southfield, Michigan.

For more information about Origen, please visit http://www.origenfinancial.com/.

  Financial Tables Follow...




                          ORIGEN FINANCIAL, INC.
                       CONSOLIDATED BALANCE SHEETS
                          (Dollars in thousands)

                                  ASSETS

                                               (Unaudited)
                                              December 31, December 31,
                                                    2008         2007
                                                    ----         ----
  Assets
       Cash and Equivalents                        $14,118      $10,791
       Restricted Cash                              12,927       16,290
       Investment Securities                         9,739       32,393
       Loans Receivable                            911,947    1,193,916
       Servicing Advances                                -        6,298
       Servicing Rights                                  -        2,146
       Furniture, Fixtures and Equipment, Net          401        2,974
       Repossessed Houses                            4,543        4,981
       Other Assets                                 11,858       14,412
                                                    ------       ------
  Total Assets                                    $965,533   $1,284,201
                                                  ========   ==========


                   LIABILITIES AND STOCKHOLDERS' EQUITY
  Liabilities
       Warehouse Financing                              $-     $173,072
       Securitization Financing                    775,120      884,650
       Repurchase Agreements                             -       17,653
       Note Payable-Related Party                   29,351       14,593
       Derivative Liabilities                       57,887       20,443
       Other Liabilities                            24,980       25,405
                                                    ------       ------
  Total Liabilities                                887,338    1,135,816
                                                   -------    ---------

  Equity                                            78,195      148,385
                                                    ------      -------

  Total Liabilities and Equity                    $965,533   $1,284,201
                                                  ========   ==========

                          ORIGEN FINANCIAL, INC.
                   CONSOLIDATED STATEMENT OF OPERATIONS
               (Dollars in thousands, except for share data)
                                (Unaudited)

                              Three Months Ended      Twelve Months Ended
                                  December 31,            December 31,
                                  ------------            ------------
                                2008        2007        2008        2007
                                ----        ----        ----        ----
  Interest Income
     Total Interest Income     $22,931     $24,681     $90,827     $91,267
     Total Interest Expense     13,993      17,122      60,732      59,740
                                ------      ------      ------      ------
  Net Interest Income Before
   Loan Losses and Impairment    8,938       7,559      30,095      31,527
     Provision for Loan Losses   6,724       2,954      17,745       8,739
     Impairment of Purchased
      Loan Pool                    153           -         749           -
                                   ---         ---         ---         ---
  Net Interest Income After
   Loan Losses and Impairment    2,061       4,605      11,601      22,788
  Non-interest Income (Loss)
     Servicing Income               63         699       1,366       2,502
     Losses on Loan Sales            -           -     (22,377)          -
     Other                       2,200         508      (1,719)      1,133
                                 -----         ---      ------       -----
  Total Non-interest Income
   (Loss)                        2,263       1,207     (22,730)      3,635
  Non-interest Expenses
     Total Personnel             2,240       3,842      18,936      16,888
     Loan Origination &
      Servicing                  3,465         392       7,336       1,437
     Goodwill Impairment             -      32,277           -      32,277
     Investment Impairment          32       9,179          32       9,179
     State Taxes                    97         (57)        475         270
     Total Other Operating       1,017       2,029       6,487       6,721
                                 -----       -----       -----       -----
  Total Non-interest Expenses    6,851      47,662      33,266      66,772
                                 -----      ------      ------      ------
  Loss From Continuing
   Operations Before Income
   Taxes                        (2,527)    (41,850)    (44,395)    (40,349)
  Income Tax Expense (Benefit)     (14)         64          61          47
                                   ---         ---         ---         ---
  Loss From Continuing
   Operations                   (2,513)    (41,914)    (44,456)    (40,396)
  Income (Loss) From
   Discontinued Operations Net
   of Income Taxes              (1,912)      2,783       9,092       8,629
                                ------       -----       -----       -----
       Net Loss                $(4,425)   $(39,131)   $(35,364)   $(31,767)
                               =======    ========    ========    ========


  Weighted Average Common
   Shares Outstanding,
   Basic                    25,689,639  25,395,205  25,689,639  25,316,278
                            ==========  ==========  ==========  ==========
  Weighted Average Common
   Shares Outstanding,
   Diluted                  25,689,639  25,395,205  25,689,639  25,316,278
                            ==========  ==========  ==========  ==========
  Basic Earnings Per Common
   Share:
     Loss From Continuing
      Operations                $(0.10)     $(1.65)     $(1.73)     $(1.60)
     Income (Loss) From
      Discontinued
      Operations                 (0.07)       0.11        0.35        0.34
                                 -----        ----        ----        ----
     Net Loss                   $(0.17)     $(1.54)     $(1.38)     $(1.26)
                                ======      ======      ======      ======


DATASOURCE: Origen Financial, Inc.



CONTACT:  W. Anderson Geater, Chief Financial Officer of Origen

Financial, Inc., [phone]; or Leslie Loyet of Financial Relations

Board, [phone], , for Origen Financial, Inc.



Web Site:  http://www.origenfinancial.com/ 

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