Representing added fallout from the credit crisis, Delta Financial Corp. said on Monday that it wouldn’t pay a dividend in the third quarter. The small, sub-prime lender cited “current market conditions.”
The company had been paying out a 20-cent annualized dividend. In a regulatory filing, the Woodbury, N.Y. lender stated that its board would continue to check out market conditions and the lender’s own financial performance to gauge when and if it would pay its next dividend.
Delta also reported that Bank of America has agreed to extend by a month the maturity date on a warehouse line of credit that had been set to expire on August 31. Such loans are made by banks to a loan originators to finance mortgages from the time they’re originated until when the loan is sold is securitized. “There can be no assurance that the parties will agree to renew this facility beyond this one-month extension, whether on terms favorable to the Registrant or at all,” Delta warned. The company has five warehouse lenders, according to the Associated Press.
Bank of America’s action comes on the heels of its announcement last week that it would invest $2 billion in the shares of Countrywide Financial, the nation’s biggest mortgage lender. Earlier this month, Countrywide reported that it had drawn down all of an $11.5-billion credit facility and speeded up plans to move its mortgage business to Countrywide Bank FSB. Like Delta, David Sambol, Countrywide’s president and CEO, cited “market conditions” in explaining the credit drawdown.