American Mortgage Network Suffers $9.2M Net Loss

SAN DIEGO, CA-American Residential Investment Trust Inc. has reported that its San Diego-based REIT subsidiary, American Mortgage Network, has suffered a net loss of $9.2 million for the quarter ended June 30, 2002.

The loss was primarily due to the recognition of mark-to-market losses on derivative instruments of approximately $8.8 million, say company officials. “AmNet’s second quarter results reflected these mark-to-market losses resulting directly from unprecedented volatility in the bond market in the past two months,” according to a recent statement from American Residential.

However, this same market volatility has caused an increase in the value of AmNet’s unsold loan inventory, which is expected to result in significant loan sale gains for the third quarter of this year. These gains will partially offset the second quarter’s loss, as the company says it expects to be operationally breakeven in the fourth quarter of 2002. AmNet has already funded $584 million of mortgage loans in the second quarter of 2002 and closed loan volumes are now predicted to hit $500 million per month by the end of this year.