Another mortgage REIT has called off a press conference. "Saxon Capital, Inc., a residential mortgage lending and servicing real estate investment trust (REIT), today announced it is delaying its 2005 fourth quarter and year end earnings press release and related conference call. The Company expects to report its complete operating results on or before March 31, 2006."

"Management is reviewing the..derivative transactions used in its hedging strategy to manage interest rate risks from 2001 to the third quarter of 2005. If the Company determines that it did not meet the requirements of SFAS 133, a restatement of results from 2001 to the third quarter of 2005 may be required. 'We are disappointed in this delay, but need more time to review these complex accounting issues before reporting our results,' said Michael Sawyer, CEO of Saxon. Robert Eastep, CFO of Saxon said, 'In light of recent scrutiny as to the application of hedge accounting, we are reviewing our accounting treatment of our derivative transactions related to our hedging strategy to ensure that our financial statements adhere to SFAS 133."

"The Mortgage Loan Operations segment originates, purchases, and securitizes primarily nonconforming residential mortgage loans."

From Market Watch. "The FDIC reported that industry net income of $32.9 billion fell 5% from the record set in the third quarter. 'What we see is a banking industry that is fundamentally strong but continues to face some important challenges ahead,' Martin Gruenberg, the FDIC's acting chairman said."

"Among the highlights of the FDIC report, growth in residential mortgage assets increased by $24 billion, the smallest quarterly increase in two years. Also, the net interest margin fell to 3.49% from 3.5% in the fourth quarter, a 15-year low also seen in the second quarter. 'As short-term interest rates rose more rapidly than longer-term rates, the difference between them has narrowed,' the FDIC said."

"'The narrower spread has made depository institutions' traditional business of taking deposits and making loans less profitable, as banks and thrifts tend to make longer-term loans and fund them with shorter-term deposits.'"

"In the wake of the prime lending sector's refinance contraction, the nonprime sector has picked up and become more mainstream, accounting for 28% of total loan originations, according to a panel member at the MBA Expo in Phoenix. Michael Drawdy, senior vice president at Countrywide Financial Corp., said half of subprime ARMs will be due in the summer and over the next 14 months. 'There will be some people who can't pay for an ARM change,' Mr. Drawdy said."

"'That is why you must make sure there is a system in place for collections, to make sure borrowers know their options.' Panelists talked about repayment plans and ARM modifications aimed at helping borrowers stay in their homes. Over the next 12-24 months, there is a potential for severe delinquencies, they said."