Delta Financial Announces Securitization Backed by $900 Million in Mortgage Loans

Delta Financial Corporation (NASDAQ:DFC) announced that it has priced a securitization, backed by $900 million of mortgage loans, through its subsidiary, Renaissance Mortgage Acceptance Corp. -- the Renaissance Home Equity Loan Trust 2007-3. "Pricing this securitization was paramount for our Company in light of the rapid deterioration in the credit markets,” explained Hugh Miller, president and chief executive officer. "This securitization removes the majority of the loans from our warehouse lines which greatly reduces our exposure on these facilities. We structured this transaction as a Real Estate Mortgage Investment Conduit (REMIC) gain-on-sale securitization, in which we sold all the bonds and intend to sell the residual interest. As such, we will account for this transaction as a sale and not as a financing.” As expected, the execution on this securitization was materially less favorable than in past quarters, reflecting the highly illiquid market conditions where virtually no mortgage-related securitizations are being consummated or sold. The Company expects to obtain better execution on future securitizations based upon the tighter guidelines and considerably higher weighted average coupons for its more recent originations. Standard & Poor’s Ratings Services and Moody’s Investors Services, Inc., rated the securities. The securitization was co-lead managed by Banc of America Securities LLC and JP Morgan and co-managed by RBS Greenwich Capital, Deutsche Bank Securities and Citigroup. About the Company Founded in 1982, Delta Financial Corporation is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. The loans the Company originates are primarily fixed rate, and are secured by first mortgages on one- to four-family residential properties. The Company originates non-conforming loans through a network of independent brokers and the Company’s retail offices. Since 1991, Delta has completed 52 asset-backed securitizations, collateralized by approximately $19.8 billion in mortgage loans. Important Information Regarding Forward-Looking Statements. Certain statements contained in this press release, which are not historical fact, may be deemed to be "forward-looking” statements under the federal securities laws, and involve risk and uncertainties. Forward-looking statements relate to, among other things, our ability to close the securitization, our intention and ability to sell the residual interest in the securitization, the structure and ratings of the securitization, our statements as to the benefits to be realized from our financing arrangements and changes to our loan origination policies. There are many important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements. Such factors include, but are not limited to, the availability of funding at favorable terms and conditions, including, without limitation, the availability of warehouse, residual and other credit facilities; our ability or inability to continue to access the securitization and whole-loan markets on favorable terms and conditions or at all; competition; loan losses, loan prepayment rates, delinquency and default rates; repurchase obligations, early payment default, costs and potential liabilities associated with litigation, regulatory investigations or actions by state and/or federal agencies and other regulatory compliance matters and changes (legislative or otherwise) affecting mortgage lending activities and the real estate market; general economic conditions, including interest rate risk, future residential real estate values, future tax rates and demand for our products and services; the state of the housing market; and other risks identified in our filings with the Securities and Exchange Commission, including those discussed in our Form 10-K under the captions "Business–Forward Looking Statements and Risk Factors” and "Risk Factors” and our Form 10-Q under the caption "Risk Factors.” We disclaim any obligation to update or revise any of the forward-looking information contained in this press release at any future date, except as required under applicable securities laws.