Downey Financial, a top mortgage lender in California, said non-performing assets -- including delinquent loans and foreclosed real estate -- reached $1.04 billion at year end, or 7.77% of total assets. During the fourth quarter alone NPAs spiked by $618 million. The California thrift lost $56.5 million for the year versus a profit of $199.6 million in 2006. Company president Rick McGill said, "We are clearly disappointed with our results," blaming the company's problems on the weak housing market.

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