FirstFed Reports Mortgage-Related Loss

FirstFed Financial Corp., Los Angeles, has reported a mortgage-related net loss of $69.8 million ($5.11 per share), compared with net income of $32.4 million ($1.92 per share) a year earlier. The company said the loss resulted chiefly from a $150.3 million provision for loan losses due to increased delinquencies and chargeoffs on single-family loans and declines in the value of single-family homes throughout California. A year earlier, the loan loss provision totaled only $3.8 million, FirstFed said. "Adjustable-rate mortgages that have reached their maximum allowable negative amortization and now require an increased payment were a contributing factor in the higher level of delinquent loans during the first quarter of 2008," the company said. "The bank estimates that 1,310 loans with balances totaling approximately $609.9 million could hit their maximum allowable negative amortization during the rest of 2008, and that another 1,536 loans, with balances totaling $684.9 million, could hit their maximum allowable negative amortization during 2009."