Doral Shares Fall After Downgrade

The share price of Doral Financial Corp., Puerto Rico's largest mortgage lender, fell by as much as 16% Thursday after Merrill Lynch downgraded the company to "sell" from "neutral."At MortgageWire's deadline, the shares had recovered somewhat and were trading at $17, down 12% on the day. Merrill analyst Kenneth Bruce cited concerns about Doral's first-quarter earnings and "the potential for significant changes to the company's business model, which we think could introduce yet more volatility into the stock." Doral is the 70th-largest residential servicer in the U.S. or its territories. The lender's shares have fallen significantly in recent weeks over concerns about how it is valuing some of its mortgage-backed securities. Last month Doral said it was in preliminary talks to sell some interest-only strips to an unspecified financial institution.