And in Socal, no less.
NEWPORT BEACH - Downey Financial Corp., a Newport Beach-based mortgage lender, says it could be seized by regulators if it can't get an infusion of capital by the end of the year. Following the company's grim warning Tuesday, its stock fell 99 cents to below 46 cents a share, the Los Angeles Times reported. The stock is down 99 percent in the last year. Downey so far hasn't seemed a likely candidate for government help because the Treasury is aiming its massive financial bailout at lenders that have the best prospects for survival. The bank was a big player in the market for so-called option ARMs -- risky adjustable-rate mortgages that gave borrowers the option to pay so little each month that their loan amounts grew, according to The Times. Heavy defaults on such mortgages are the cause of Downey's problems. In a filing with the Securities and Exchange Commission late Monday, Downey noted it had been ordered by regulators to maintain specific levels of capital as a cushion against losses, The Times reported.
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