Another subprime lender disappoints Wall Street. "MortgageIT Holdings, Inc., a residential mortgage company organized as a real estate investment trust, today announced operating and financial results for the fourth quarter and year ended December 31, 2005.'

"Doug Naidus, Chairman and CEO, commented, 'MortgageIT generated substantial growth in 2005, building its high credit quality portfolio to approximately $4.7 billion and producing well over 100% growth in loan origination volume, to $29.2 billion. During the second half of 2005, an increasingly challenging market environment developed, including a disruption in the value of sub-prime mortgage loans, intensifying competition for prime mortgage loans, and a yield curve that inverted, which had the effect of increasing borrowing costs for both our portfolio and our mortgage bank.'"

"'During the fourth quarter of 2005, gain on sale margins for loans sold to third parties declined to 71 basis points, a level we have not seen for the past couple of years. We expect this environment to persist over the near term.'"

"Mr. Naidus continued, 'Our portfolio has continued to perform well and prepayment speeds have slowed dramatically during the first quarter of 2006. We are actively managing our product mix and have substantially exited the wholesale sub-prime business, which drove losses at our mortgage bank in the fourth quarter of 2005 and is expected to contribute to a consolidated net loss in the first quarter of 2006.'"

"The Company now expects to fund approximately $150 million to $200 million of sub-prime loan volume during the first quarter of 2006. Also, the Company expects future sub-prime loan volume not to be a material component of its total originations as the Company will have substantially exited the wholesale sub-prime business by the end of the first quarter of 2006."

"During the first quarter of 2006, the Company continues to reduce its sub-prime staff and operations. These further reductions, along with the disposition of the remaining sub-prime loans, will negatively impact first quarter 2006 earnings."

"The company originates and sells self-originated single-family residential mortgage loans that comprise of adjustable rate mortgage (ARM) loans and hybrid ARM loans. It also involves in prime and subprime loan origination, underwriting, funding, brokering, and secondary marketing."

A reader posted this report. "New York Mortgage Trust, Inc., a self-advised residential mortgage finance company organized as a real estate investment trust, today reported results for the three months and twelve months ended December 31, 2005."

"Comments from Management: '2005, particularly the latter part, presented some significant challenges for us and the mortgage industry as a whole. In our mortgage banking subsidiary we experienced record loan origination volume for the year, an 86% increase over 2004, yet our operating results were less favorable than expected."

"Steven B. Schnall, Chairman, President and Co-CEO, commented. 'With the flattening of the yield curve and the corresponding increase in our portfolio financing costs, we have also experienced earnings pressure in our mortgage portfolio management segment. In response, during the first quarter, we are contemplating and are likely to dispose of a portion of our lower yielding acquired mortgage backed securities portfolio, thus realizing losses already recognized on our balance sheet.'"