HomeBanc Posts Loss During Restructuring

HomeBanc Corp., Atlanta, has reported a loss to common stockholders of $23.8 million ($0.42 per share) for the first quarter 2007, vs. profits of $986,000 ($0.01 per share) a year earlier.The company has been undergoing a restructuring of its operations, but market conditions, said president and chief executive Kevin Race, have made it difficult to make a profit. "The disruption of the subprime market has had an effect on all segments of the mortgage market, as is reflected in our significantly deteriorated gain on sale margins during the first quarter. Although we expect this pricing pressure to be temporary in nature and we have been encouraged by the recovery in gain on sale execution we have experienced to date in the second quarter, we believe that gain on sale margins may not completely recover to what we consider to be normal until 2008," he said. The company's origination volume was down by 13% when compared with the first quarter 2006, hurt by a 25% decline in loan production from Florida.