Good day everyone and welcome to the Origen Financial Fourth Quarter 2007 Financial Results Conference Call. Today’s call is being recorded. At this time for our opening remarks and introductions I would like to turn the conference over the Miss Leslie Loyet, please go ahead.

Thank you, I’d like to thank everyone for joining us today. Yesterday we sent out a press release outlining the results for fourth quarter and year end. If anyone has not received the release, please visit Origen’s website at originfinancial.com to retrieve a copy. Management will provide an overview of the quarter and year and then we’ll open the call up to your questions. Before we begin we’d like to remind participants that certain statements made during this conference call, which are not historical fact, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. Although the company believes the expectations reflected in the forward-looking statements are based on actual assumptions, the company can provide no assurance that its expectations can be achieved. Factors and risks may cause actual results to differ materially from expectations or details from March 13 press release and from time to time the company’s periodic filing with the FCC. The company makes no obligation to advise or update any forward-looking statements for events or circumstances occurring after the date of the release. Joining us today from management of Origen financial are Ron Klein, Chief Executive Officer and Andy Geater, Chief Financial Officer. At this time, I’d now like to turn the call over to Ron for his opening remarks. Please go ahead.

Thank you and good morning. This has been a challenging period for our company as well as for the entire capital markets and we have tried to explain, as best we can, where we are in our business. We have issued a comprehensive press release describing our financial position. At this time, as we said, we are pursuing all available alternatives and cannot provide more specifics other than what we have disclosed in our press release. We will answer your questions as best we can and before we do that, Andy will go through the financials.

Thank you, Ron. In accordance with last nights press release, loss per share on diluted weighted average common shares outstanding, based on generally accepted accounting principles was $1.54 for the fourth quarter 2007 and $1.26 for the full year. Due to the nature of the items which created a GAAP loss for the fourth quarter and the full year, REIT net taxable income for 2007 was not affected, and there will be no re-characterization of dividends reported to stockholders on form 1099 DIV for the tax year 2007. The fourth quarter 2007 net loss of $31.4 million and the full year loss of $31.8 million, compared to net income of $2 million and $7 million for the year ago quarter and full year respectively. Subsequent to the performance of our annual good will impairment test at December 31, 2007, we determined that our recorded goodwill was fully impaired. This impairment was due to current market and economic conditions which resulted in a further and extended decline in the quoted market price of our equity securities below tangible book value and as a result we recorded a non-cash goodwill impairment charge in the fourth quarter of 32.4 million. No impairment of goodwill is recorded during the year ended December 31. 2006. In February of 2008, four outstanding repurchase agreements were retired by the liquidation of one of our asset-backed securities which was financed through one of the repurchase agreements. The asset backed security that was liquidated had been characterized on our financial statements since its acquisition in 2001 as held to maturity and accordingly was recorded at amortized cost. As a result of the liquidation, we re-characterized the asset as held for sale at December 31, 2007 and recognized an other-than-temporary impairment charge of $9.2 million. Absent the impact of the…

Thank you, sir. The question and answer session will be conducted electronically. (Operator Instructions) We’ll pause for just a moment to allow everyone a chance to signal. Alright we’ll take John Diffendal with BB&T Capital Markets. John Diffendal-BB&T Capital Markets: Hey good morning, Ron. Well I just, I know you had to deal with a lot in this release, but I just wanted to ask a few questions, make sure I sort of saw what the fourth quarter and full year was in terms of originations, just the nature of how the originations sort of wound up. What were your fourth quarter dollar originations and full year originations?

You know we can come back to that; I’ll get those for you. And still, we were definitely tightening up our originations as we moved through and our originations were going down throughout the quarter and through yesterday effectively. And obviously the reason for that, as we said before, we continued to increase our credit standards because we obviously saw market conditions not exactly being conducive. We had securitized in October, in what everybody thought was the worst market ever and we weren’t anxious to rush to put more loans on the books necessarily. John Diffendal-BB&T Capital Markets: Okay I understand and just give me a broad sort of sense. I mean I know you’ve been strong in California; can you give us a sense of what you were doing as you sort of exited the year and what percentage of your business is still in California?

About the same, nothing changed in terms of that. John Diffendal-BB&T Capital Markets: Which was what?

Over 50%. John Diffendal-BB&T Capital Markets: Okay and new versus used?

Everything was pretty much consistent. The quality was probably a little higher, but the breakdown and everything else was generally the same. John Diffendal-BB&T Capital Markets: And that new percentage was what?

The new percentage? John Diffendal-BB&T Capital Markets: Yes.

Fourtyish. John Diffendal-BB&T Capital Markets: Okay so it’s still about sixtyish used. Okay got it.

Right. John Diffendal-BB&T Capital Markets: Okay.

The full year we did 346 million. John Diffendal-BB&T Capital Markets: 346 million originations.

Right. John Diffendal-BB&T Capital Markets: Okay, got it. Okay well thank you.

No problem

Your next question comes from Lance Gad with Greenfield Hill Capital.

Yes, could you give us a little more color on the $9 million investment write down? What is the face market value of the securities, is it 22 million? So we took a 40% write down? And how much similar securities are now in the held-to-maturity portfolio still?

I think that you, Andy will be an end to describing how that shows up on our financial statements because of the timing difference between GAAP income and taxable income or loss as the case may be. As Andy mentioned, we had four bonds that were secured by manufactured housing loans. They were in secure type pools that we talked about and we had them financed on repurchase agreements with our banker. Our banker made margin calls on those, we met those, there is nothing wrong with the collateral supporting those, there’s nothing wrong with the bond, and they were cash flowing. Our interest rate was well below what our coupon is on those. However, due to conditions in the market, as you are witnessing, as we speak, with situations like Bear Sterns, the lenders don’t particularly care whether the collateral is cash flowing or good. They look at it, especially on a repurchase line, as where it can be sold immediately. And since there are few bids for asset-backed paper in general and people have trouble financing, they margin called these bonds. We were margin called down to a value substantially below where we thought it was worth and substantially below where a normal valuation would put it, but we were forced to sell it. We sold it for $0.70 on the dollar. And that particular bond, in rough numbers, was about 30 million and we took a 30 point hit on it.

But it was sufficient to pay off the $18 million approximate balance of all of our repurchase.

So we now own three manufactured housing bonds that are unencumbered.

Right.

And the total face value of those?

North of $10 million.

Those are still held to maturity, you haven’t taken a right out of those?

That’s correct.

Okay, now I would assume that you have not made any, this is just the December 31, ’07 quarter, so any of your marks don’t reflect what’s happened from January 1, ’08 on right?

Well in effect we don’t have any marks to make. These loans are unencumbered and they’re held to maturity, the bonds. And our $1 billion loan portfolio that is match funded and securitized, you know, it’s also on a portfolio and we don’t market-to-market either.

Right. Could you give us an idea if you were to market-to-market what kind of mark you’d have to take?

Well the fact of the matter is, is that the billion dollars represents our loans that are in securitized pools, so they have been match funded and we get the excess spread off of the cash flow from a billion dollars. We had 830-ish million of debt against them and so we are basically collecting interest, net of servicing and losses and that is the income stream that comes to us and will continue to come to us.

Right and that 830 is all, that’s been funded already, there’s no issue with that being called right?

None, it is match funded through maturity at a rate less than what we are earning on the loans themselves.

Right, now what could happen, you have a line that’s expiring, I think today. What could happen as far as additional market calls and could you give us some color as to your present relationship with Citi and what’s happening there? In other wards…

First of all, in terms of margin calls, I mean I don’t think that anybody can predict what type of margin call you would have, when it would occur or why it would occur and we have zero control over it number one. Number two, as we stated in our press release, we have loans that are currently on our warehouse line that we are going to sell, which will pay off our entire warehouse facility that will leave us with our supplemental facility. And that supplemental facility is roughly is roughly $50 million. Citi has extended that subject to certain terms and conditions until mid-June. That facility, of $50 million, is secured by the value of all the excess cash flow from that billion dollars that I spoke about, which effectively we referred to as our residual assets and we also have our platform lending business, our insurance businesses that are part of that and our servicing portfolio. So, we have all the cash flow from all those businesses to support the debt on that supplemental facility. And as far as our relationship with Citi goes, I think that we have always had a good relationship with our bankers. I think that unlike the hundreds of other companies that have been put out of business rather instantaneously, including over the last few days Carlisle Capital having major problems and Thornburg having major problems, we have and continue to work with our lender. We’ve had a good relationship and the fact that our credit quality has been outstanding and we have basically out performed every expectation they had in terms of the performance of our collateral, has allowed us to maintain that relationship. Having said that, there are no guarantees as to how they will act or react at any point in time.

Could you give us some idea as to how the secondary markets for manufactured housing loans are? Stuff that you have or how much of a haircut from PAR do you think you’ll have to take, from it if any?

Well I think that, as we went through the press release, we talked about the fact that the reason that we were exiting temporarily, the origination business, is because that we believe at this point the way the market looks it is not likely that we could be profitable in originating new loans. And therefore, between the cost of originating and where you could get out, you would not make money. I think that in fact there is a demand for MH loans by several players. I think that there are numerous banks who are buying our collateral, our type of collateral, meaning manufactured housing and the fact of the matter is, is that at this point in time, as the world has kind of come full circle on that manufactured housing, because of all the changes that all the lenders have made out there, in changing the things that went of previously in MH, we’re a forerunner of what was going to happen in the sub prime business. I would venture that the best performing collateral in many lenders portfolios or many bond buyers portfolios are their MH paper.

Thank you.

(Operator Instructions) We’ll go next to Ronald Redfield with Redfield Blonsky Ronald Redfield-Redfield Blonsky & Co.: Hi, good morning guys. Could you give us an estimate and a high-low is fine, of what you anticipate the book value to be at March 31, or if you wanted to give it as of today’s date or yesterday’s date, nothing exact.

You know I’m not in a position to do that; however I think you can see from the press release that we do not anticipate making money from our new loans, but the rest of our businesses continue to be profitable. Ronald Redfield-Redfield Blonsky & Co.: Well than let’s say, I guess there’s a question just judging and you know market price under a dollar and then book value right now looks to be around $5.85 or there about. To me, looking at it, I’m assuming that you’ve put all the stress and you mentioned a mark-to-market in anticipation of the margin call, is there any chance that book value as of today is less than $3.00, less than $4.00 or, you know, not to put you on the spot.

I think that it’s hard for us to look ahead and give future predictions of what book value will be, but I’ll go back to what we have said before, which is that we have always said that we can stop originating new loans and run our platform businesses and collect the excess spread off of our billion dollar loan portfolio, continue that to be profitable and have excess left over. We also said it depended where in the cycle we were, viva the loan sale and whether or not, as part of our various alternatives, what we would do. If we chose the alternative that, as we mentioned here, selling the company or selling off pieces of the company, that would impact what we would do. If we continue to run the company that would impact what we would do. But what we’ve always said is that, we do not have to originate loans to be profitable. Ronald Redfield-Redfield Blonsky & Co.: When do you expect the 10-K to be filed?

Monday. Ronald Redfield-Redfield Blonsky & Co.: Monday and as of Thornburg, do you see any potential or any order to discussions of any restatements, potential restatements?

We’re not anticipating restatements based on our deliberations with our auditors. Ronald Redfield-Redfield Blonsky & Co.: Okay, based on anything?

No, based on nothing that we’re aware of at this point. Ronald Redfield-Redfield Blonsky & Co.: And then not to be the dead horse, you know I do that often, but right now book value is 585, the way I read everything it’s assuming a going concern and I’m assuming you have a going concern in your 10-K, that none of that’s been, first I’ll ask that. Is there any potential for a going concern issue in the 10-K?

Well the auditor’s have until Monday to make that determination and as auditor’s do, they play things very close to the vest. Ronald Redfield-Redfield Blonsky & Co.: Well I’m sure if there was a going concern you would already know it with the 10-K being issued less than a business day away.

Well we continue to have discussions with the auditor’s on the nature of their final report. Ronald Redfield-Redfield Blonsky & Co.: But is going concern one of the issues you all are talking about?

That’s something you have to, that’s a hurdle you have to pass at the end of every audit cycle, so yes that has been discussed. Ronald Redfield-Redfield Blonsky & Co.: Okay so, how do I say this? If the book value is, like I said, 585 now and by what I read in your report last night, it looks like most of the material book value write offs have already been shown in impairment. So, even if you knocked off another $2.00, which I would find unlikely, based on what I read in the report I read last night, you can’t comment now if that’s, am I interpreting it incorrectly? I’m not alone here, it’s the full…

I don’t think that you’re interpreting it incorrectly in terms of that fact, you know, we don’t have very many assets on our books that can suffer impairment. Basically, we have match, a billion dollars of match-funded loans. They can’t be mark-to-market. We have $10 million of asset backed loans and we believe that is approximately close to the market value. And we have a servicing business and we have a platform business, so the only assets that are in an ’08 classification would be the loans on our warehouse. And so, depending on where we are visa vi the loan sale, that is the only asset that is subject to a value in our opinion, you know, less than PAR. Ronald Redfield-Redfield Blonsky & Co.: So, could I take that a little further? I think you’ve paid off about a little less than a hundred on our warehouse during the quarter, is that right?

No, that’s not correct. Ronald Redfield-Redfield Blonsky & Co.: Oh it’s not, because I thought, oh I’m sorry I’m reading it wrong. I am sorry. Alright, I’m good, thanks guys.

We’ll take our next question from Jeff Cross with Cross Capital.

Yes, I’ve got a couple of questions. I won’t say good morning except as a wish. As things stand today, can you give us a ballpark figure as to what your monthly cash flow is running?

Positive is the best way we can put it. I mean it’s more than sufficient to cover our debt on the supplemental facility, pay all operating expenses and still be profitable. And basically what we have used our excess for prior to yesterday, when we announced that we were temporarily suspending loan originations was for the capital to put up for the haircut for new loans; so that cash will be available to us as well since we will no longer be putting new loans on the books.

You will be able; you will be deploying that, in otherwards, to reduce your credit lines?

Correct.

I wish I could get a better base. Can you give us any guidance, the way things stand right now, as to what your net interest margin is?

Yes well, we’ll get you that and obviously upon the sale of the loans it is going to change, but we’ll get you the calculated current cost of our 830 million which is also in the K, of debt, and the excess interest, or the actual coupon of our billion dollars. So before the end of the call we’ll have that for you.

Okay good. You know, a lot of what I’m looking at is has there been any adjustment, especially with the extension, you know, that you’ve spread to a base rate that would, you know, increase your cost of debt capital?

Yes, not materially.

Okay well that’s actually pretty good.

I think just go back with the spread. I think if you go back to the third quarter and you look at the bulk of our revenue, we have revenue that comes from, effectively three different sources: Our third party fee business, servicing fees, both of those sources of revenue are continuing and from the third party business growing. We also have and by the way neither of those businesses require any capital what so ever on our part; the other source of revenue is interest income. As of 9/30 we had a billion something of loans on our books in securitized pools. That number obviously goes down every month as the loans amortize, but not significantly on a monthly basis and then we added loans over the course of between 9/30 and yesterday that were new interest paying assets that we were earning a positive spread on. We are going to sell those assets, so it would remove that positive spread. However, we retain the positive spread that we were earning on our billion dollars prior to that. So we have positive income coming in from our billion dollar loan portfolio, which we’re going to continue to manage, positive income coming in from our servicing business and positive income coming in from our third party businesses; against that we have our overhead running through that all year prior to the write down that we took, we made over 49.5 million net income. Clearly we have taken steps to right size our platform since we are no longer doing organic originations for now. We have left intact the capacity to reenter the market, should market conditions, or the other alternatives that we’re exploring, warrant that.

Okay, I guess part of my question is, I mean I think everybody on this call realized, even before today that to a certain extent, well maybe I shouldn’t even put the words certain in there, that Citi group is disorganized at the top and scared stupid generally. Have you been talking, have you engaged in material discussions with other bankers?

You know, in order to answer your question, I think that we would go back in time and say that we’ve always talked to other bankers and done that to make sure that we got the best credit facilities available to us and for our shareholders. Up until this recent turn, there has been no better liquidity provider for us than Citi Group, but we have had and continue to maintain excellent relationships with several other banks. What we saw in the market place was that, in effect, the terms and conditions for warehouse facilities did not leave much upside to make any money, assuming that you could exit those in a profitable way in a securitized market and we’re very capital intensive and to attract capital on that basis, you know, would probably also not be attractive. So for now we have chosen to suspend new organic originations until market conditions are such that it makes sense to do so at a high enough profit margin to satisfy any investor.

Okay, I think you’ve taken care of me at this juncture, thank you.

Our next comes from Chris Xanthone (sp) with Roboty

Hi, Ron, good afternoon.

How are you?

I’m well thanks. So you’re going to have roughly a billion dollars in securitized loans that have been fully funded and if I look at the trailing 12 month net-interest income, for ’07, the $23 million number. Holding everything else constant, how do you expect that number will change?

I think that the short answer is to the extent that on a go-forward basis from the point of time when we sell the loans that are not securitized, because in that number were some un-securitized loans, I think that just assuming from a constant basis, that number would go down over time because the loans are beginning to mature. Actually they amortized. So as they amortize the loan balance goes down which is less interest income that we’re earning and less interest expense that we’re paying. At the same time, the 170 million of residual interest, or the unencumbered loans, are also starting to pay down and as we have mentioned, at a certain point in time, which we have reached, the residuals from the various securitizations begin to release cash flow to us. That is the so called step-down date in the securitizations. That occurs four years after the securitization and is subject to building up the OC, over collateralization amount, to the required target. And so from this point forward, we will be getting additional cash flow as the over collateralization begins to release cash back to us. So while interest income on that static pool will go down, because the unpaid principle balance is going down, we will be getting additional income, or I’m sorry additional cash, because the over collateralization will be releasing to us.

Understood, so let me just back up. The 23.6 million, how much of that was net interest income from loans that have not yet been securitized?

The vast majority is from the un-booked securitized loans; because we securitized in October and we securitized in May. So between those two periods of time, between October and May, you’re looking roughly five months, you know we built up a pool and on average they were on there for three months and the pool was roughly, you know, 15% the size of the un-booked billion dollars or something like that.

Okay, so if I were to do a net present value type of that cash flow stream, how many years out do you go?

The NPB on an average life would be, we think the average lives of our pools are a little north of six years. However, the cash flow will continue until the last loan pays off. Now most of our loans are 20 years and under, but we do have some 30 year loans, so it is conceivable that there will be cash flow coming for 30 years. But, the vast majority of that will be paid off substantially shorter than that, in particular because 90 some percent of our loans are 20 years or less.

Okay so and then on the servicing, that’s the second cash flow stream.

Correct.

And does that number that shows up on the press release, is 1.95, I guess that number would have a similar life?

Some of that number will have a similar life. I mean we do service for others and those loans potentially could have longer lives on them where we’ll collect a servicing fee. Additionally we continue to add new servicing from our third-party businesses and that is a business, should we choose to, attend the expanded, because we have excess capacity there.

And how much do you do there?

We service about a billion eight roughly. Total.

A billion eight? Well that’s tall, but how much do you do, you might…

Third party’s about 5, 600 million.

Five, 600 million, so that would be then in addition to the net-interest income, in addition to the servicing, so now you have 500, 600 million worth of those loans that you’re servicing?

Well, we have about a billion eight roughly as loans that we’re servicing, of which we earn a fee and all ancillary income on, including insurance and late fees and all other assorted fees.

Right, so on the 500, 600 what’s the annual fee income on that?

You know, it’s a few million dollars. Probably on average, I think on average our entire portfolio is because the initial third party business we had is the old Dinex pools that we inherited that we service at a low fee, but in general on a gross income basis we’re probably getting 15 to 18 million a year off of the servicing platform.

Right and then, 15 to 18 million and what’s the cost associated with operating that platform that would, you know, line up underneath the 15 to 18?

Less. The breakdown, well the actual cost to service versus our fully loaded cost of service and we keep our servicing at taxable rates subsidiary as well so there is potentially income tax to pay there, but you know in general I think you could look at it based on the numbers I gave you, that figure in rough numbers, the average servicing fee we receive is somewhere between 90 and 100 basis points. Our incremental cost to do one more loan is in the 40 some basis points and our overall cost is somewhere between the two. But the net number is positive. And we have several numbers that we’ve initiated that are going to bring additional fee income to that platform. Then again, as we mentioned before, that business is cash flow positive and requires zero capital for us to run.

Okay, so you also mentioned that there are going to be head count reductions to right size the business. What’s your target there, we’re at 24?...

We want to make sure that the number one thing we do is maximize shareholder value. So we’re going to one, right size the entire company, which we’ve done, because the only thing that we’ve stopped doing is originating new loans and we have taken steps to make sure that the current business can absolutely continue to service our billion dollars in the same manner that has led to record low delinquency’s that we’re currently seeing, record low defaults, record high recovery rates et cetera. Our third party business is expanding and growing, but we have capacity there and we have high degrees of efficiency within our system. The only excessive area that we have right now is the fact that we have not foreclosed the possibility of reentering the new origination business and we have some additional personnel that can handle that business. And in fact, you know, that does not take an additional amount based on new business we would anticipate doing over the course of a 12 month period once the market is effectively open for us to originate again, if we chose to do that.

You totally lost me.

Sorry. Basically we’ve right sided the business appropriately right now.

Oh you have so, you expect then, the personal costs that we’ve seen….

The personal costs will go down.

Okay. Last question, is there going to be an NOL coming out of this?

Not from ’07.

Yes, as we mentioned, there is no re-characterization of income in ’07 and I will have to see what happens as we move forward to ’08 depending on where we saw… We will make money, from this point forward, on our operating businesses. The issue is the pricing of the loan sale.

Okay great. Thanks, Ron.

Thank you.

We’ll go next to David Dusenberry with Dalton Greiner.

Thank you. Morning, guys.

Morning.

Just following, a lot of those questions you went through were kind of questions I was going to ask. I just want to clarify on a few. So as I look at that loan servicing revenue line item, is that the 5 to 600 million the third party servicing fees that are coming through there or is it the 1.8 billion total?

It’s the 1.8 billion total.

Okay so your net interest margin, the on balance sheet asset, is net of that 100 basis point servicing fee?

I’m sorry; I didn’t understand your question David.

So, it’s more of a geography question in where things show up on the income statement so that I don’t double count the impact of the servicing.

The servicing fees or income are included in the non-interest revenue.

Okay fine. Have you seen any manufactured housing servicing portfolios trade recently? And if you have, what multiple servicing fee did they go at?

We have seen various servicing pools out there, but we haven’t seen them as strictly servicing per se. We’ve seen them more as packages of loans; these are primarily aged loans from other lenders who have exited lending period. And we have been approached by many of the folks that are looking to buy those loans to service those assets. And from a stand point of where servicing would be acquired, you know, I think it depends on who would be looking at that servicing. Our idea would be to not pay for servicing, to be hired as a sub servicer by these funds that buy these loans or have these MH bonds that control some of the securitizations and they can grab the servicing. And to the extent that there are bidders for servicing, you know I think that there is probably a high price to pay because there is a lot of stable payment in these pools unlike stick built. So when we say the average life is six years plus, it’s a very stable prepayment rate and therefore somebody can price that based on getting that servicing string for an extended period of time and all the ancillary fees.

You know in the single family servicing market, kind of rule of thumb is liable to go anywhere from 3 to 5 times servicing revenue. Can you give me, just generally, any kind of rule of thumb for where these things would trade?

I do not know since we have not actually bid them per se and we haven’t seen many pools of just servicing rights trade in MH. But I think in general what you could look at is that the going market rate is anywhere between 75 basis points to 125 or 150 basis points depending on the credit quality of the loans concerned and also the amount of work that is to be required and the average balance of the loans. Because obviously the more delinquent, the more intensive and it really doesn’t matter if it’s a $30,000.00 average balance or a $70,000.00 average balance, it’s the same work, but your fee is bigger. Now what we have seen is some people charge on basis points and some people charge on a dollar-per-loan basis. And in terms of our third party, what we charge basically goes along those same lines. There are third party platform players and it also depends on how far through the process they want us to go. So in a large number of cases for the communities, we do not have to do the remarketing and repossession. We work in conjunction with them and they take care of the back end.

Okay and you know you went through a good process here to kind of walk us through the steps how your balance sheet has changed and I apologize for coming through with kind of a dummy type question but…

We dispensed of all the if stuff, so any question is a good question.

Alright, you haven’t heard this one yet. But, at the end of these transactions, let’s assume you pay off your warehouse financing, what liabilities will be outstanding? So obviously that would get your liabilities off the balance sheet, that securitization, financing, that’s part of the permanent on balance sheet financing that will stay. Repo’s have been paid off and note payable of 14.5 million?

That will be outstanding secured by our servicing platform.

Okay and if you could just help me, what’s in other liabilities? Without, if it’s a lot of little items, don’t worry about going through it.

There are a lot of little items except for one large item which relates to our comprehensive income and has to do with hedging positions on our securitized portfolios and that’s really a non-cash item because that amortizes out over the hedge period, which is a fairly long period. So it’s not a traditional, about $20 million worth of that number is not a traditional accounts payable.

And then obviously, just to make sure that everybody is noting, which I’m sure they are, is that the, effectively, other than what I would call ordinary course accounts payable, once we pay off our warehouse facility, what we have outstanding is our supplemental facility. And we have 90 days effectively to, you know, that facility has been extended for 90 days and we continuously face different challenges and that facility is supported by everything we just told you about. So, you know, we have adequate cash flow to cover it, we are going to start paying principle on it and either we will refinance that with Citi Group, if they so desire to do so or we will refinance it with somebody else.

Also another, David, another significant item in those accounts payable and accrued expenses relates to restricted cash that we hold on behalf of the investors and the securitized loans. That’s just the timing. We hold cash before we make distributions to the investors, so at 12/31 that was about $16 million of that number float, you know that phase of much, much reduced amount of traditional payables after the pro-CI that I mentioned.

Okay and I was kind of scanning through the press release to see if I could find the exact words, but as I read through it, it sounded as if, if I remember the wording and correct me if I’m wrong, but you had said “once we are able to clear out the warehouse, we will use a portion of the funds we’ve paid on the warehouse line of credit”. So, as I read it looking for clues, it sounded as if you were showing a little bit of confidence that you’d be able to at least pay that off, am I…

You are reading that correctly.

Okay, thanks very much guys.

Thank you.

We’ll go next to Lance Gad of Greenfield Capital.

Just two questions, one an additional clarification. The $9 million investment loss, the other three pieces are still being held to maturity without a write down, is that correct?

That’s correct. We have both the intent and the ability to hold both of those to maturity.

So on a mark-to-market basis, I mark your financial assets to market, the 10-K will show what the value was as of December 31, we’ll see that difference right, the negative mark?

You will see the negative mark on the bond that we sold, there will be no negative mark on the remaining portion that are held for maturity, because they are not subject to mark-to-market.

Okay and I guess as a read you don’t have to show that, you’re not a bank right?

That’s correct.

Okay, but those are clearly worth substantially less than book right?

That’s a matter of opinion. I mean in our opinion, we will get what we have them on the books for with a return.

But on a point in time, if you were to sell those today, you’d probably have to take, you know, 49 million of loss, at least, on 22, so they’re probably worth 50, 60, $0.70 cents on the dollar today right?

If they were a trading account, that would be correct.

And if, what would, if it was a trading account, what are those worth today, what would the fair market value be?

You know, each bond is different and each bond is different because they represent different faces in various capital structures in different deals.

Jut a guestimate.

You know, I mentioned before we sold our other ones at 70 on the dollar and you know I think that that’s probably a good price.

Is that the best of the four? Usually when you sell something…

Yes you’re right; usually when you sell you sell your best assets.

Right.

We sold our biggest assets.

Okay, okay. My other, the other question, the downsizing which is taking place in the first quarter of ’08, am I correct that all the expenses for that will be in the first quarter? Will you just, you’ll have to take a hit for laying off people and whatever, could you give us some idea as to what that would be? I would think you would take an extraordinary loss or something right? For that activity?

We will definitely be quantifying the impact of that and recording the proper amount. We really haven’t finished that process yet.

You have a guestimate, are we talking about single digit millions or tens of millions or?

Well since our total G&A, it’s not end of May.

Okay right, that’s what I’m, could you give me a guestimate within a million dollar range or something or?

It’s a few million dollars a year.

A few million dollars a year, so on a charge, a one time shot, what would that number be in the first quarter, guestimate?

We’re in the process of formulating that now and I would be very reluctant to have…

Okay and one other on the going concern issue, I don’t know. You don’t think it’s fairly likely the accountants are going to put… I don’t know having a, you know my experience with accounting firms it would seem you’d have to be incredibly super salesman to convince them not to put a thing that risk is a going concern, whatever the language is.

We obviously don’t control the accountants and can’t predict what they’re going to do as far as, in today’s environment, I think you’re 100% correct. I think that, you know, and we’ll continue to do so on this call. We’ve laid out, in terms of our income statement, the only thing that is going to change effectively is, on a go forward basis, from the point of time when we sell the loans is that the amount of the loans that were not securitized, that net income spread will disappear. That is the only thing that is going to change. And I mentioned it before, the increase on the debt, on the expansion of the supplemental facility is not material to the overall numbers and we are adding fee based business. So in our view and coupled with the fact that we have cash releasing from the residual, in our view we have more than adequate cash flow to cover the debt, pay our expenses and have a profit. The risk is out there, as we quantified here, but our line is extended to June 13. We feel confident that there is more than sufficient collateral backing that and we would hope to have no issue refinancing that facility.

Okay, thank you.

We’ll go next to John Diffendal with B&B Capital Markets. John Diffendal-B&B Capital Markets : Just a couple of follow ups and I know you said you’d shut down originations. I heard some just rumblings within the industry, but if you might hope to be back more quickly in California. Can you maybe, is there any way you can address that? Is that something that if you reestablished originations, where you might come back first?

I think that at the appropriate time, we will figure out where the best place to originate is. Obviously from our standpoint we would go where we’ve had the most success and where the best credit quality is and where our best performing loans are. John Diffendal-B&B Capital Markets : And secondly, you said you’re going to look to take the warehouse line down, obviously. Is there any reason, explain to me why it wouldn’t be any different than, as you said, than the other things, the $0.70 on the dollar in terms of liquidating that. Is there a reason why that would be higher or lower than that number if you were making it in a whole loan sale to somebody else?

Yes because those are whole loans of 720 FICO 940 coupon paper that’s performing and readily liquid an you can finance those at wherever you can finance them in a low interest rate environment, if assuming you had the where with all to finance versus bonds that have a fixed coupon that are lower than, you know, they’re in the 7% range that we bought four years ago or more at a discount and represent lower trounces in securitized pools. John Diffendal-B&B Capital Markets : So if you were to look at that it would be much, much closer to PAR, so to speak.

I’m not going to speculate on where the price is, but what I’m telling you is that there is no comparison between somebody’s analysis of , you know, single A manufactured housing bonds that were issued by a lender that’s not here anymore and that the agencies have at investment rate, probably BBB and backed by loans that are fine, that are performing, there is a lot of excess over collateralization, but they probably represent loans that have a 650 FICO. John Diffendal-B&B Capital Markets : Alright, thanks Ron, thanks so much I appreciate your openness and certainly the fact that you’ve been a responsible lender in a tough market and having problems not of our making, thanks so much.

We’ll go next to Josh Brain with AG semiconductor

Good morning, I joined late, so this question may have been answered already, but what is the collateral now supporting the warehouse line? The question was mentioned that it’s 146 outstanding. How much, what’s behind that right now?

The outstanding balance, you know the outstanding principle balance of the loans that we’re in the process of selling.

Which is?

Roughly $170 million.

Okay and what supports the supplemental facility of 50?

A billion dollars worth of loans that are match funded on our balance sheet, our entire servicing business and our entire origination platform business, third party businesses for others.

But not the un-securitized loans themselves?

No.

Okay and what was the balance of the supplemental facility at year end? It’s now 50 the press release says, but what was it at year end?

49.5.Which means basically that we have, going back to the cash flow situation is that the originations that we’ve been doing for the past 2 ½ months, we’ve basically supported from internal cash.

Okay, thank you.

Certainly.

Gentlemen, our last question comes from Matt Servich (sp) with Stopia Capital (sp) Matt Servich (sp)-Stopia Capital (sp): Hi you guys, thanks for being so forthcoming on this call. Actually all of my questions were answered and I tried to get out of queue. Anyway thanks a lot and have a good day.

Thank you.

And at this time I would like to turn the conference back to Mr. Klein for any additional or closing comments.

Well we appreciate your patience in listening to us. We’ve tried to lay out, as best we can, what our balance sheet looks like, what our future business income streams look like. You know, we believe and we have said that we see significant value in our various businesses. We obviously face challenges in this market like every other lender out there and you know, it’s very hard to predict what will happen and it’s certainly beyond our control. What we can say is what we’ve consistently said throughout; is that we originated high quality loans that are performing at record levels that far exceed our expectations. We will be the beneficiary of that cash flow and we have certain challenges in terms of refinancing our supplemental facility. But, we believe that the quality of the assets and the other businesses more than adequately support that, paying that debt down and providing a return. So, obviously this has been a challenging period for our company and our employees, who have done, as far as I’m concerned, a great job in a very difficult environment. And you know, we’re at record low delinquencies and hopefully we continue to remain there and we’re looking forward to having better news as we progress through this cycle. So thank you.

That does conclude today’s conference call. You may disconnect at this time.