Origen Financial Fights Against the Tide

Origen Financial (ORGN), the major player in originating and servicing manufactured housing loans, reported improved results for the third quarter. The Company posted GAAP net income of $0.11/share and bumped its dividend by a penny to $0.09/share.

Origen has recently shown signs of life after a long period of dormancy following the manufactured housing blow-up in 2001. Manufactured housing has been out of favor ever since interest rates hit historical lows and subprime financing enabled many marginal prospects to obtain financing for home ownership.

Nonetheless, Origen has survived, and with interest rates rising and the decline in subprime financing, they have profited from their increased market share of the manufactured housing market. However, the manufactured housing industry continues to struggle, with September shipments down 14 percent compared with September 2006, and year-to-date shipments down 22 percent from last year.

Although Origen was able to increase its originations 30 percent over last year's third quarter, the manufactured housing market continues its slide. It remains to be seen if Origen can overcome the rising tide of manufactured housing decline.

Disclosure: none