UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 000-50721

ORIGEN FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-0145649
State of Incorporation		I.R.S. Employer I.D. No.

27777 Franklin Road
Suite 1700
Southfield, Michigan 48034
(248) 746-7000
(Address of principal executive offices and telephone number)

Securities Registered Pursuant to Section 12(b) of the Act:
None

Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, Par Value $0.01 per Share

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No þ

Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer   o (Do not check if a smaller reporting company)		Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No þ

As of June 30, 2007, the aggregate market value of the registrant’s stock held by non-affiliates was approximately $119,175,698 (computed by reference to the closing sales price of the registrant’s common stock as of June 29, 2007 as reported on the Nasdaq National Market). For this computation, the registrant has excluded the market value of all shares of common stock reported as beneficially owned by executive officers and directors of the registrant; such exclusion shall not be deemed to constitute an admission that any such person is an affiliate of the registrant.

As of February 29, 2008, there were 26,014,918 shares of the registrant’s common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

     Portions of the registrant’s definitive Proxy Statement to be filed for its 2008 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.

 

 

TABLE OF CONTENTS

		Page
PART I
ITEM 1. BUSINESS			2
ITEM 1A. RISK FACTORS			7
ITEM 1B. UNRESOLVED STAFF COMMENTS			15
ITEM 2. PROPERTIES			15
ITEM 3. LEGAL PROCEEDINGS			15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS			16
PART II
ITEM 5. MARKET FOR THE COMPANY’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS			16
ITEM 6. SELECTED FINANCIAL DATA			19
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			20
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK			37
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			41
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE			73
ITEM 9A. CONTROLS AND PROCEDURES			73
ITEM 9B. OTHER INFORMATION			73
PART III			73
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES			74
SIGNATURES			75
EXHIBIT INDEX			76
List of Subsidiaries
Consent of Grant Thornton LLP
Section 302 Certification of CEO
Section 302 Certification of CFO
Section 906 Certifications

As used in this report, “Company”, “Us”, “We”, “Our” and similar terms means Origen Financial, Inc., a Delaware corporation, and, as the context requires, one or more of its subsidiaries.

PART I

ITEM 1. BUSINESS

General

     Origen Financial, Inc. is an internally-managed and internally-advised Delaware corporation that is taxed as a real estate investment trust, or REIT. We are a national consumer manufactured housing lender and servicer. During the year ended December 31, 2007, we originated loans in 45 states and we serviced loans in 47 states. We and our predecessors have originated more than $2.9 billion of manufactured housing loans from 1996 through December 31, 2007, including $344.6 million in 2007. We additionally processed $111.6 million in loans originated under third-party origination agreements in 2007. As of December 31, 2007, our loan servicing portfolio of over 40,800 loans totaled approximately $1.8 billion in loan principal outstanding.

     Origen Financial, Inc. was incorporated on July 31, 2003. On October 8, 2003, we began operations when we acquired all of the equity interests of Origen Financial L.L.C. and its subsidiaries. In the second quarter of 2004, we completed the initial public offering of our common stock. Currently, most of our operations are conducted through Origen Financial L.L.C., our wholly-owned subsidiary. We conduct the rest of our business operations through our other wholly-owned subsidiaries, including taxable REIT subsidiaries, to take advantage of certain business opportunities and ensure that we comply with the federal income tax rules applicable to REITs.

     Our executive office is located at 27777 Franklin Road, Suite 1700, Southfield, Michigan 48034 and our telephone number is (248) 746-7000. We maintain our servicing operations in Ft. Worth, Texas and have a regional office located in Glen Allen, Virginia. As of December 31, 2007, we employed 257 people.

     Our website address is www.origenfinancial.com and we make available, free of charge, as soon as reasonably practicable after we file such reports with the Securities and Exchange Commission, on or through our website all of our periodic reports, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Recent Developments

Developments Based on Current Adverse Market Conditions

     Recent and current conditions in the credit markets have adversely impacted our business and financial condition. During 2007, the credit markets that we depend on for warehouse lending for originations and for securitization of our originated loans, as well as the whole loan market for acquisition of loans we originate, deteriorated. This situation began with problems in the sub-prime loan market and subsequently has had the same effect on lenders and investors in asset classes other than sub-prime mortgages, such as our manufactured housing loans.

     Despite actions by the Federal Reserve Bank to lower interest rates and increase liquidity, uncertainty among lenders and investors has continued to reduce liquidity, drive up the cost of lending and drive down the value of assets in these markets. The specific effects are that banks and other lenders have reported large losses, have demanded that borrowers reduce the credit exposure to these assets resulting in “margin calls” or reductions in borrowing availability, and have caused massive sales of underlying assets that collateralize the loans. The consequence of these sales has been further downward pressure on market values of the underlying assets, such as our manufactured housing loans, despite the continued high intrinsic quality of our loans in terms of borrower creditworthiness and low rates of delinquencies, defaults and repossessions.

     Our business model depends on the availability of credit, both for the funding of newly originated loans and for the periodic securitization of pools of loans that have been originated and funded by short-term borrowings from warehouse lenders. The securitization process permits us to sell bonds secured by the loans we have originated. The

proceeds from the bond sales are used to pay off the warehouse lenders and recharge the availability of funding for newly originated loans.

     If warehouse funding is not available, or is available only on terms that do not permit us to profit from loan origination, our origination of loans for our own account only can be continued at a loss. If there is no market for securitization at rates of interest and leverage levels acceptable to us, our only alternative for satisfying our obligations under our warehouse line is to sell the manufactured housing loans to a purchaser. If purchasers are unwilling to pay at least the full amount advanced to borrowers plus all related fees and costs, sales of loans are not profitable for us.

     As a result of these conditions:

	•		Because of the unavailability of a profitable financing in the securitization market, on March 14, 2008, we sold our portfolio of approximately $174.6 million in aggregate principal balance of unsecuritized loans with a carrying value of $175.7 million for approximately $155.0 million.
	•		We used the proceeds of the loan sale primarily to pay off the outstanding loan balance of approximately $146.4 million on our warehouse credit facility, which expired on March 14, 2008.
	•		Because of the absence of a profitable exit in the securitization market and reduced pricing in the whole loan market, we suspended originating loans for our own account until these markets recover. We will, however, continue to provide loan origination services for third-parties.
	•		Our stock price has steadily declined to a point where it is well below its tangible net book value. As a consequence, we recorded a non-cash impairment charge, writing off our entire goodwill of $32.3 million in December 2007.
	•		In February 2008, to satisfy our lender, we sold an asset-backed bond for $22.5 million, in order to fully pay off $19.6 million of repurchase agreements secured by this bond and three others that we continue to hold. Sale of this bond resulted in our recording an asset impairment charge of $9.2 million in 2007.
	•		Our lender under our supplemental advance credit facility secured by a pledge of our residual interests in our securitizations has agreed to extend the due date of the facility until June 13, 2008. This facility otherwise would have expired on March 14, 2008 and we would have been obligated to repay approximately $50 million outstanding under the facility.
	•		On March 13, 2008, we decreased our work force by 16% to reduce costs that were associated with originating loans for our own account.

     We believe that these actions were necessitated by and are a result of the market conditions described above. We do not believe that the actions reflect on the quality of our continuing business operations or the credit performance or long-term realizable value of our securitized loan portfolio, which in our opinion continues to remain very high.

     Although we have determined to suspend loan originations for our own account, we currently continue to operate our third-party loan origination business and management of our securitized loan portfolio.

2007 —A Securitization

     We completed a securitization of approximately $200.4 million in principal balance of manufactured housing loans on May 2, 2007. The securitization was accounted for as a financing. As part of the securitization we, through a special purpose entity, issued $184.4 million in notes payable. Additional credit enhancement was provided by a guaranty from Ambac Assurance Corporation. The notes are stratified into two different classes. The Class A-1 notes pay interest at one month LIBOR plus 19 basis points and have a contractual maturity date of April 2037. The Class A-2 notes pay interest based on a rate established by the auction agent at each rate determination date and

have a contractual maturity date of April 2037. Approximately $182.4 million of the proceeds was used to reduce the aggregate balance of notes outstanding under our warehouse facility with Citigroup Global Markets Realty Corp. (“Citigroup”).

Bridge Financing

     On September 11, 2007, we, through our primary operating subsidiary, Origen Financial L.L.C., entered into a $15 million secured financing arrangement with the William M. Davidson Trust u/a/d 12/13/04 (the “Lender”), an affiliate of one of our principal stockholders (the “Bridge Financing”). The Lender is a grantor revocable trust established by William M. Davidson as the grantor. Mr. Davidson is the sole member of Woodward Holding, LLC, which owns approximately 6.8% of our common stock. The Bridge Financing includes a senior secured promissory note (the “Note”) and a senior secured convertible promissory note (the “Convertible Note”). The Note and the Convertible Note are each one-year secured notes bearing interest at 8% per year and are secured by a portion of the our rights to receive servicing fees on our loan servicing portfolio. The Note, which has an original principal amount of $10 million, and the Convertible Note, which has an original principal amount of $5 million, are each due on September 11, 2008. The term of the Note and the Convertible Note may be extended up to 120 days with the payment of additional fees. The Convertible Note may be converted at the option of the Lender into shares of our common stock at a conversion price of $6.237 per share. In connection with the Bridge Financing, we issued a stock purchase warrant to the Lender. The stock purchase warrant is a five-year warrant to purchase 500,000 shares of our common stock at an exercise price of $6.16 per share.

2007 —B Securitization

     We completed a securitization of approximately $140.0 million in principal balance of manufactured housing loans on October 16, 2007. The securitization was accounted for as a financing. As part of the securitization we through a special purpose entity, issued $126.7 million of a single AAA rated floating rate class of asset-backed notes to a single qualified institutional buyer pursuant to Rule 144A under the Securities Act of 1933. Additional credit enhancement was provided by a guaranty from Ambac Assurance Corporation. The notes pay interest at one month LIBOR plus 120 basis points. Approximately $122.4 million of the proceeds was used to reduce the aggregate balance of notes outstanding under our Citigroup warehouse facility.

Loan Origination, Acquisition and Underwriting

General

     We and our predecessors have originated more than $2.9 billion of manufactured housing loans from 1996 through December 31, 2007, including $344.6 million in 2007. We additionally processed $111.6 million in loans originated under third-party origination agreements in 2007. As discussed above in “Recent Developments,” we have ceased originating new manufactured housing loans other than under third-party origination agreements.

     Although we have ceased originating new manufactured housing loans for our own account, we intend to maintain our origination platform, including our primary underwriting tool, TNG™, an internally-developed, externally-validated proprietary statistical scoring system that ranks the risk of default for manufactured home-only loans, and our proprietary web-based delivery system known as Origen Focus™. By retaining our origination platform, we intend to continue to provide comprehensive loan origination services to third parties, as described below, and to retain the ability to resume our loan origination business for our own account.

Third-Party Originations

     We currently provide comprehensive loan origination services for several companies, including Affordable Residential Communities, Sun Communities, Inc., Hometown America and YES Communities, each of which is a nationwide owner-operator of manufactured housing communities. Under these arrangements, we commit to use our origination platform to originate manufactured housing loans for these third parties, which own the loans. In addition, we have the right to receive a servicing fee with respect to many of these third party loans, although currently we do not retain servicing rights for the Hometown America loans. In the future we may provide origination services to other third parties under similar arrangements. We enter into these types of third-party

arrangements primarily to strengthen our relationships within the manufactured housing industry with the goal of creating additional sources of revenue, notably servicing revenue. In addition, the increased loan origination volume provided by these arrangements provides valuable information that we use in our internal credit modeling.

Underwriting

     We underwrite home-only loans, using our internally-developed proprietary credit scoring system, TNG. We developed and continue to enhance TNG to predict defaults using empirical modeling techniques. TNG takes into account information about each applicant’s credit history, debt and income, demographics, and the terms of the loan. The TNG model is fully integrated into our origination system and is based on our historical lending experience. We have used TNG to back-test all of our home-only loans originated since 1996 by Origen Financial L.L.C., its predecessors and us. Following internal testing and validation, Experian Information Solutions, Inc., a leading consumer credit reporting and risk modeling company, independently validated the TNG model.

     All home-only applications are scored by TNG and then reviewed by an underwriter. TNG provides the underwriter a recommendation of “pass,” “fail” or “review.” The recommendations are based upon the underlying TNG score as well as other factors that may arise from the application. TNG alerts underwriters to particular attention areas and provides review recommendations. It also provides a reason for declination on fail recommendations. TNG is used to rescore the application throughout the origination and underwriting process as the initial application information is verified and/or terms and conditions of the loan change. In specially approved markets a comparable appraisal is used to determine chattel manufactured housing values.

     We also underwrite mortgage loans, often called “land-home” loans, collateralized by both the manufactured houses and the underlying real estate. Because the land-home and home-only business lines have different characteristics, predictive modeling has only been possible for the home-only applications. We use our Internal Credit Rating grid and a full property appraisal to underwrite land-home loans. The grid is a traditional underwriting method that primarily takes into account the applicant’s credit history, debt capacity and underlying collateral value.

     In addition to using our proprietary TNG scoring model, we underwrite loans based upon our review of credit applications to ensure loans will comply with applicable lender guidelines. Our approach to underwriting focuses primarily on the borrower’s creditworthiness and the borrower’s ability and willingness to repay the debt, which is evaluated through TNG. Each contract originated is individually underwritten and approved or rejected based on the TNG result and an underwriter’s evaluation of the terms of the purchase agreement, a detailed credit application completed by the prospective borrower and the borrower’s credit report, which includes the applicant’s credit history as well as litigation, judgment and bankruptcy information. Once all the applicable employment, credit and property-related information is received, the application is evaluated to determine whether the applicant has sufficient monthly income to meet the anticipated loan payment and other obligations.

Servicing

     We service the manufactured housing loan contracts that we have originated or purchased as well as manufactured housing loan contracts owned by third parties. As of December 31, 2007, our loan servicing portfolio of over 40,800 loans totaled approximately $1.8 billion in loan principal outstanding. Our annual servicing fees range from 50 to 150 basis points of the outstanding balance on manufactured housing loans serviced. The majority of loans we service are included in securitized loan pools.

     Servicing activities include processing payments received, recording and tracking all relevant information regarding the loan and the underlying collateral, collecting delinquent accounts, remitting funds to investors, repossessing houses upon loan default and reselling repossessed houses. Our loan servicing activities are centralized at our national loan servicing center in Ft. Worth, Texas.

     Although we strive to continuously reduce delinquency, our primary servicing objectives are to maintain a stream of borrower payments, limit loan defaults, and maximize recoveries on defaulted loans. Accordingly, we perform loss mitigation activities on delinquent loans whereby we maintain the borrower’s delinquent status during the payment plan or other loan workout situation. The industry has typically reported borrowers in loss mitigation as current. In our efforts to maximize recoveries on defaulted loans, we may hold repossessed collateral longer to

achieve a retail sale to a consumer for a higher price rather than a quicker sale to a reseller at a lower price. This business strategy may cause us to report higher delinquencies, but usually leads to improved default and recovery performance.

Securitizations and Management of Securitization Residuals

     We have historically securitized a substantial portion of our owned manufactured housing loans. In the past, after accumulating manufactured housing loans, we used transactions known as asset-backed securitizations to pay off short term debt, replenish funds for future loan originations, limit credit risk, and lock in the spread between interest rates on borrowings with the interest rates on our manufactured housing loans. In our securitizations, the manufactured housing loans were transferred to a bankruptcy remote trust that then issued bonds collateralized by those manufactured housing loans. By securitizing loans in this way, we eliminated the credit risk on our manufactured housing loans up to the amount of bonds sold to investors. Likewise, the form of securitization was designed to insulate the securitized loans from our creditors if we file for bankruptcy so that the loans supporting the bonds issued by the trust will not be encumbered. This process enabled us to fund our business at competitive rates without asset-backed bond investors relying on our corporate credit-worthiness. The most recent securitization we have completed was October 2007. As described earlier, under “Recent Developments,” we do not believe that current market conditions are favorable to profitable securitizations of our loans.

     In May 2007, we completed our 2007-A securitization of approximately $200.4 million in principal balance of manufactured housing loans.

     In October 2007, we completed our 2007-B securitization of approximately $140.0 million in principal balance of manufactured housing loans.

     In March 2008, as a result of the unfavorable securitization markets, we sold approximately $174.6 million in principal balance of manufactured housing loans in a whole loan sale to a third party.

     We actively manage our residual interests in our securitized loan portfolio by monitoring and analyzing cash flow, delinquencies and recoveries.

Insurance

     As a complement to our origination and servicing business, we offer property and casualty insurance at the point of sale for manufactured housing loans we have originated or service. Additionally, we have historically placed property and casualty insurance for lapsed policies, primarily for manufactured housing loans we have originated or service. The closing of many of the manufactured housing loans we originate is delayed because the borrower has not obtained insurance or the insurance policy obtained by the borrower does not meet lender guidelines. Although we have ceased originating new loans for our own account, we intend to continue to offer property and casualty insurance in connection with our third-party loan origination services.

Competition

     The manufactured housing finance industry is very fragmented. The market is served by both traditional and non-traditional consumer finance sources. Several of these financing sources are larger than us and have greater financial resources. In addition, some of the manufactured housing industry’s larger manufacturers maintain their own finance subsidiaries to provide financing for purchasers of their manufactured houses. Historically, our largest competitors in the industry have included Clayton Homes, Inc., through its subsidiaries 21st Mortgage Corporation and Vanderbilt Mortgage and Finance, Inc., U.S. Bank, and San Antonio Federal Credit Union. However, as we have ceased originating new loans for our own account, these companies may no longer be our direct competitors. Traditional financing sources such as commercial banks, savings and loans, credit unions and other consumer lenders, many of which have significantly greater resources than us and may be able to offer more attractive terms to potential customers, also provide competition in our market. Competition among industry participants can take many forms, including, customer service, marketing/distribution channels, interest rates and credit-related factors.

Corporate Governance

     We have implemented the following corporate governance initiatives to address certain legal requirements promulgated under the Sarbanes-Oxley Act of 2002, as well as Nasdaq corporate governance listing standards:

	•		Our Board of Directors determined that at least one member of the Audit Committee of our Board of Directors qualifies as an “audit committee financial expert” as such term is defined under Item 401 of Regulation S-K. Each Audit Committee member is “independent” as that term is defined under applicable SEC and Nasdaq rules.
	•		Our Board of Directors adopted a Financial Code of Ethics for Senior Financial Officers, which governs the conduct of our senior financial officers. A copy of this code is available on our website at www.origenfinancial.com under the heading “Investors” and subheading “Corporate Governance” and is also available in print to any stockholder upon written request to Origen Financial, Inc., 27777 Franklin Road, Suite 1700, Southfield, Michigan 48034.
	•		Our Board of Directors established and adopted charters for each of its Audit, Compensation and Nominating and Governance Committees. Each committee is comprised of independent directors. A copy of each of these charters is available on our website at www.origenfinancial.com under the heading “Investors” and subheading “Corporate Governance” and is also available in print to any stockholder upon written request to Origen Financial, Inc., 27777 Franklin Road, Suite 1700, Southfield, Michigan 48034.
	•		Our Board of Directors adopted a Code of Business Conduct and Ethics, which governs business decisions made and actions taken by our directors, officers and employees. A copy of this code is available on our website at www.origenfinancial.com under the heading “Investors” and subheading “Corporate Governance” and is also available in print to any stockholder upon written request to Origen Financial, Inc., 27777 Franklin Road, Suite 1700, Southfield, Michigan 48034. Additionally, we maintain a “Confidential and Anonymous Ethics Complaint Hotline” maintained with an independent third party so that employees may confidentially report infractions against our Code of Business Conduct and Ethics to the Compliance Committee. Through this arrangement, each Compliance Committee member has access to two-way anonymous communications with the reporting employee. There are three submission methods (voicemail, email and web form). There is a message management system that provides the member an up-to-date snapshot of all incoming and outgoing communications. The ethics hotline is accessible through our intranet system.
	•		The Sarbanes Oxley Act of 2002 requires the establishment of procedures whereby each member of the Audit Committee of our Board of Directors is able to receive confidential, anonymous communications regarding concerns in the areas of accounting, internal controls or auditing matters. We have established a “Confidential and Anonymous Financial Complaint Hotline”, or whistleblower hotline, maintained with an independent third party. Through this arrangement, each Audit Committee member has access to two-way anonymous communications with the whistleblower. There are three submission methods (voicemail, e-mail and web form). There is a message management system that provides the member an up-to-date snapshot of all incoming and outgoing communications. The Whistleblower Hotline is accessible through our website at www.origenfinancial.com under the heading “Investors”.

ITEM 1A. RISK FACTORS

     Our prospects are subject to certain uncertainties and risks. Our future results could differ materially from current results, and our actual results could differ materially from those projected in forward-looking statements as a result of certain risk factors. These risk factors include, but are not limited to, those set forth below, other one-time events, and important factors disclosed previously and from time to time in our other filings with the Securities and Exchange Commission. This report contains certain forward-looking statements.

Risks Related to Our Business

Continuing adverse market conditions might lead us to experience further liquidity problems.

     As of March 14, 2008, we owed approximately $46 million under a supplemental advance credit facility with Citigroup. The credit facility is collateralized by our residual or retained ownership interests in several of our securitized loan pools. Due to recent adverse conditions in the credit markets, uncertainty among lenders and investors has continued to reduce liquidity, drive up the cost of lending and drive down the value of assets in these markets. Further downward market value adjustments on the collateral securing our supplemental advance credit facility might cause Citigroup to require us to provide additional capital upon relatively short notice. If this capital is unavailable, or if it is not available upon terms acceptable to us, then Citigroup may seize the collateral securing this credit facility and pursue all of its other remedies under the credit facility.

We may not have access to adequate capital to meet our existing debt obligations.

     On March 14, 2008, our supplemental advance credit facility with Citigroup was extended to June 13, 2008. As of March 14, 2008, the amount due under the facility was approximately $46 million. Given the current adverse conditions in the credit markets, we have been unable to secure financing under favorable terms to continue originating loans for our own account and for other purposes. There can be no assurance that we will be able to renew, refinance or pay off the credit facility when it expires. Even if such funding is available, we might not be able to obtain it on favorable terms. If we are unable to satisfy our obligations when the credit facility expires, Citigroup may foreclose on the pledged residual interests, and the proceeds of that sale may be less than we would receive if we sold the interests ourselves. As a result, we may not receive any proceeds from such foreclosure sale, and we may be liable to repay any remaining balance on the credit facility.

Our auditors have expressed substantial doubt about our ability to continue as a going concern.

     Our audited financial statements for the fiscal year ended December 31, 2007, were prepared under the assumption that we will continue our operations as a going concern. Our registered independent accountants in their audit report have expressed substantial doubt about our ability to continue as a going concern. Continued operations depend on our ability to meet our existing debt obligations and the financing or other capital required to do so may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we cannot continue as a viable entity, our stockholders may lose some or all of their investment in the company.

Cessation of loan originations for our own account may affect our continuing lines of business.

     Originating manufactured home loans has historically been the foundation of our business and has provided a continuing stream of servicing revenue. While our business also includes servicing, third-party originations, insurance and residual asset management, because we have currently determined to cease originating manufactured home loans for our own account, our other business lines may be adversely affected as the revenues associated with these business lines were in large part generated as a result of new loans originated for our own account. As a result, our third-party origination and servicing business lines may fail to grow, and perhaps may decline, if third parties perceive that we do not have the capacity to provide a full range of services.

Our business may not be profitable in the future.

     We had net losses of $31.8 million during the twelve months ended December 31, 2007. While we had net income of approximately $7.0 million during the twelve months ended December 31, 2006, we incurred net losses of approximately $2.7 million and $3.0 million during the twelve months ended December 31, 2005 and 2004, respectively. Origen Financial L.L.C., our predecessor company, which we acquired in October 2003, experienced net losses in each year of its existence while growing its loan origination platform and business, including net losses of approximately $23.9 million for the period from January 1, 2003 through October 7, 2003 and $29.2 million for fiscal year 2002. We will need to generate significant revenues to maintain profitability. If we are unable to achieve and maintain sufficient revenue growth, we may not be profitable in the future.

We depend on key personnel, the loss of whom could threaten our ability to operate our business successfully.

     Our future success depends, to a significant extent, upon the continued services of our senior management team. In general, we have entered into employment agreements with these individuals. There is no guarantee that these individuals will renew their employment agreements prior to the termination of the employment agreements, some of which are scheduled to expire in 2008, or that they otherwise will remain employed with us. The market for skilled personnel, especially those with the technical abilities we require, notably in servicing, is currently very competitive, and we must compete with much larger companies with significantly greater resources to attract and retain such personnel. The loss of services of one or more key employees may harm our business and our prospects.

Some of our investments are illiquid and their value may decrease.

     Some of our assets are and will continue to be relatively illiquid. In addition, certain of the asset-backed securities that we hold may include interests that have not been registered under the relevant securities laws, resulting in a prohibition against transfer, sale, pledge or other disposition of those securities except in a transaction that is exempt from the registration requirements of, or otherwise in accordance with, those laws. Our ability to vary our portfolio in response to changes in economic and other conditions, including current market conditions, is currently limited and may become even more constrained. No assurances can be given that the fair market value of any of our assets will not further decrease in the future.

Certain securitization structures may cause us to recognize income for accounting and tax purposes without concurrently receiving the associated cash flow.

     Certain securitizations are structured to build overcollateralization over time with respect to the loans that are the subject of the securitization or to accelerate the payment on senior securities to enhance the credit ratings of such securities. Accordingly, these structures may cause us to recognize income without concurrently receiving the associated cash flow. We have used such securitization structures in the past. These securitization structures and the possible resulting mismatch between income recognition and receipt of cash flow may cause us to require capital to meet our REIT distribution requirements, which capital may not be available to us on acceptable terms, if at all.

We may pay distributions that result in a return of capital to stockholders, which may cause stockholders to realize lower overall returns.

     We may pay quarterly distributions that result in a return of capital to our stockholders. Any such return of capital to our stockholders will reduce the amount of capital available to us, which may result in lower returns to our stockholders. None of the distributions in 2007 represented a return of capital. Return of capital amounted to 5.5% of distributions in 2006.

We may not generate sufficient revenue to make or sustain distributions to stockholders.

     We intend to distribute to our stockholders substantially all of our REIT net taxable income each year so as to avoid paying corporate income tax on our earnings and to qualify for the tax benefits accorded to a REIT under the Internal Revenue Code. Distributions will be made at the discretion of our Board of Directors. Our ability to make and sustain cash distributions is based on many factors, including the performance of our manufactured housing loans, our ability to borrow at favorable rates and terms, interest rate levels and changes in the yield curve and our ability to use hedging strategies to insulate our exposure to changing interest rates. Some of these factors are beyond our control and a change in any such factor could affect our ability to pay future distributions. We cannot assure our stockholders that we will be able to pay or maintain distributions in the future. We also cannot assure stockholders that the level of distributions will increase over time and that our loans will perform as expected or that the growth of our loan acquisition and servicing business will be sufficient to increase our actual cash available for distribution to stockholders.

We may engage in hedging transactions, which can limit gains and increase exposure to losses.

     Periodically, we have entered into interest rate swap agreements in an effort to manage interest rate risk. An interest rate swap is considered to be a hedging transaction designed to protect us from the effect of interest rate fluctuations on our floating rate debt and also to protect our portfolio of assets from interest rate and prepayment rate fluctuations. We may use hedging transactions, including interest rate swaps, in the future. The nature and timing of interest rate risk management strategies may impact their effectiveness. Poorly designed strategies may increase rather than mitigate risk. For example, if we enter into hedging instruments that have higher interest rates embedded in them as a result of the forward yield curve, and at the end of the term of these hedging instruments the spot market interest rates for the liabilities that we hedged are actually lower, then we will have locked in higher interest rates for our liabilities than would be available in the spot market at the time and this could result in a narrowing of our net interest rate margin or result in losses. In some situations, we may sell assets or hedging instruments at a loss in order to maintain adequate liquidity. There can be no assurance that our hedging activities will have the desired beneficial impact on our financial condition or results of operations. Moreover, no hedging activity can completely insulate us from the risks associated with changes in interest rates and prepayment rates.

We may experience capacity constraints or system failures that could damage our business.

     If our systems or third-party systems cannot be expanded to support increased third-party loan originations or additional servicing opportunities, or if such systems fail to perform effectively, we could experience:

	•		disruptions in servicing loans;
	•		delays in the introduction of new third-party loan services; or
	•		vulnerability to internet “hacker” raids,

any of which could impair our reputation, damage the Origen brand, or otherwise have a material adverse effect on our business, operating results and financial condition.

     Our ability to provide high-quality service also depends on the efficient and uninterrupted operation of our technology infrastructure. Even though we have developed a redundant infrastructure to protect our systems and operations, our systems are vulnerable to damage or interruption from human error, natural disasters, telecommunication failures, break-ins, sabotage, failure to adequately document the operation of software and hardware systems and procedures, computer viruses, intentional acts of vandalism and similar events. If any of these events were to occur, our business could be materially and adversely affected. Although we maintain business interruption insurance to compensate for losses that could occur for any of these risks, such insurance may not be sufficient to cover a significant loss.

If the prepayment rates for our manufactured housing loans are higher than expected, our results of operations may be significantly harmed.

     Prepayments of our manufactured housing loans, whether due to refinancing, repayments, repossessions or foreclosures, in excess of management’s estimates could adversely affect our future cash flow as a result of the resulting loss of any servicing fee revenue and net interest income on such prepaid loans. Prepayments can result from a variety of factors, many of which are beyond our control, including changes in interest rates and general economic conditions.

We may not realize the expected recovery rate on the resale of a manufactured house upon its repossession or foreclosure.

     Most states impose requirements and restrictions relating to resales of repossessed manufactured houses and foreclosed manufactured houses and land, and obtaining deficiency judgments following such sales. In addition to these requirements and restrictions, our ability to realize the expected recovery rate upon such sales may be affected by depreciation or loss of or damage to the manufactured house. Federal bankruptcy laws and related state laws also may impair our ability to realize upon collateral or enforce a deficiency judgment. For example, in a Chapter 13 proceeding under federal bankruptcy law, a court may prevent us from repossessing a manufactured house or foreclosing on a manufactured house and land. As part of the debt repayment plan, a bankruptcy court may reduce the amount of our secured debt to the market value of the manufactured house at the time of the bankruptcy, leaving us as a general unsecured creditor for the remainder of the debt. A Chapter 7 bankruptcy debtor, under certain circumstances, may retain possession of his or her house, while enforcement of our loan may be limited to the value of our collateral.

Data security breaches may subject us to liability or tarnish our reputation.

     In the ordinary course of our business, we acquire and maintain confidential customer information. While we take great care in protecting customer information, we may incur liability if it is accessed by third parties and our customers suffer negative consequences, such as identity theft. We have taken precautions to guarantee the safety of all of our customers’ confidential information. We also periodically review all of our data security policies and procedures in an effort to avoid data breaches. However, there can be no guarantee that we will not be subject to future claims arising from data breaches.

Our profitability may be affected if we are unable to effectively manage interest rate risk and leverage.

     We derive our income in part from the difference, or “spread,” between the interest earned on loans and interest paid on borrowings. In general, the wider the spread, the more we earn. In addition, at any point in time there is an optimal amount of leverage to employ in the business in order to generate the highest rate of return to our stockholders. When market rates of interest change, the interest we receive on our assets and the interest we pay on our liabilities will fluctuate. In addition, interest rate changes affect the optimal amount of leverage to employ. This can cause increases or decreases in our spread and can affect our income, require us to modify our leverage strategy and affect returns to our stockholders. Factors such as inflation, recession, unemployment, money supply, international disorders, instability in domestic and foreign financial markets and other factors beyond our control may affect interest rates.

Risks Related to the Manufactured Housing Industry

Manufactured housing loan borrowers may be relatively high credit risks.

     Manufactured housing loans make up substantially our entire loan portfolio. Typical manufactured housing loan borrowers may be relatively higher credit risks due to various factors. Moreover, especially during periods of economic slowdown or recession, decreased real estate values may reduce the incentives that borrowers have to meet their payment obligations. Consequently, the manufactured housing loans we have originated, securitized and in which we have a residual or retained ownership interest bear a higher rate of interest, have a higher probability of default and may involve higher delinquency rates and greater servicing costs relative to loans to more creditworthy borrowers. We bear the risk of delinquency and default on securitized loans in which we have a residual or retained ownership interest. We also reacquire the risks of delinquency and default for loans that we are obligated to repurchase. Repurchase obligations are typically triggered in sales or securitizations if the loan materially violates our representations or warranties. If we experience higher-than-expected levels of delinquency or default in pools of loans that we service, resulting in higher-than-anticipated losses, our servicing rights may be terminated, which would result in a loss of future servicing income and damage to our reputation as a loan servicer.

Depreciation in the value of manufactured houses may decrease sales of new manufactured houses and lead to increased defaults and delinquencies.

     The value of manufactured houses has tended to depreciate over time. This depreciation makes pre-owned houses, even relatively new ones, significantly less expensive than new manufactured houses, thereby decreasing the demand for new manufactured houses, which negatively affects the manufactured housing lending industry. Additionally, rapid depreciation may cause the fair market value of borrowers’ manufactured houses to be less than the outstanding balance of their loans. In cases where borrowers have negative equity in their houses, they may not be able to resell their manufactured houses for enough money to repay their loans and may have less incentive to continue to repay their loans, which may lead to increased delinquencies and defaults.

Our business may be significantly harmed by a slowdown in the economy of California where we conduct a significant amount of business.

     We have no geographic concentration limits on our ability to originate, purchase or service loans. For the year ended December 31, 2007, approximately 55% by principal balance and 39% by number of loans of the loans we originated were in California. As of December 31, 2007, approximately 41% of our loans receivable by principal balance was in California. Further decline in the economy or the residential real estate market in California or in any other state in which we have a high concentration of loans could further decrease the value of manufactured houses and increase the risk of delinquency. This, in turn, would increase the risk of default, repossession or foreclosure on manufactured housing loans that have been securitized and in which we hold a residual or retained ownership interest, loans that we have sold to others, or loans that we service.

Tax Risks of Our Business and Structure

Distribution requirements imposed by law limit our flexibility in executing our business plan, and we cannot assure stockholders that we will have sufficient funds to meet our distribution obligations.

     To maintain our status as a REIT for federal income tax purposes, we generally are required to distribute to our stockholders at least 90% of our REIT taxable net income each year. REIT taxable net income is determined without regard to the deduction for dividends paid and by excluding net capital gains. We are also required to pay federal income tax at regular corporate rates to the extent that we distribute less than 100% of our net taxable income (including net capital gains) each year. In addition, to the extent such income is not subject to corporate tax, we are required to pay a 4% nondeductible excise tax on the amount, if any, by which certain distributions we pay with respect to any calendar year are less than the sum of 85% of our ordinary income for that calendar year, 95% of our capital gain net income for the calendar year and any amount of our income that was not distributed in prior years.

     We intend to distribute to our stockholders at least 90% of our REIT taxable net income each year in order to comply with the distribution requirements of the Internal Revenue Code and to avoid federal income tax and the nondeductible excise tax. Differences in timing between the receipt of income and the payment of expenses in arriving at REIT taxable net income and the effect of required debt amortization payments could require us to borrow funds on a short-term basis, access the capital markets or liquidate investments to meet the distribution requirements that are necessary to achieve the federal income tax benefits associated with qualifying as a REIT even if our management believes that it is not in our best interest to do so. We cannot assure our stockholders that any such borrowing or capital market financing will be available to us or, if available to us, will be on terms that are favorable to us. Borrowings incurred to pay distributions will reduce the amount of cash available for operations. Any inability to borrow such funds or access the capital markets, if necessary, could jeopardize our REIT status and have a material adverse effect on our financial condition.

We may suffer adverse tax consequences and be unable to attract capital if we fail to qualify as a REIT.

     Since our taxable period ended December 31, 2003, we have been organized and operated, and intend to continue to operate, so as to qualify for taxation as a REIT under the Internal Revenue Code. Although we believe that we have been and will continue to be organized and have operated and will continue to operate so as to qualify for taxation as a REIT, we cannot assure stockholders that we have been or will continue to be organized or operated in a manner to so qualify or remain so qualified. Qualification as a REIT involves the satisfaction of numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Internal Revenue Code provisions for which there are only limited judicial or administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes may occur in the area of REIT taxation, which require us to continually monitor our tax status.

     If we fail to qualify as a REIT in any taxable year, we would be subject to federal income tax (including any applicable alternative minimum tax) on our taxable net income at regular corporate rates. Moreover, unless entitled to relief under certain statutory provisions, (generally requiring reasonable cause for any REIT testing violations), we also would be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. This treatment would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability to us for the years involved. In addition, distributions to stockholders would no longer be required to be made. Even if we qualify for and maintain our REIT status, we will be subject to certain federal, state and local taxes on our property and certain of our operations.

Our use of taxable REIT subsidiaries will cause income from our servicing and insurance activities to be subject to corporate level tax and may cause us to restrict our business activities.

     To preserve our qualification as a REIT, we conduct all of our servicing and insurance activities through one or more taxable REIT subsidiaries. A taxable REIT subsidiary is subject to federal income tax, and state and local income tax where applicable, as a regular “C” corporation. Accordingly, net income from activities conducted by our taxable REIT subsidiaries is subject to corporate level tax. In addition, under the Internal Revenue Code, no more than 20% of the total value of the assets of a REIT may be represented by securities of one or more taxable REIT subsidiaries. This limitation may cause us to limit the growth of our taxable REIT subsidiaries with the potential for decreased revenue.

Our ability to originate loans for third parties may be limited due to various federal income tax rules applicable to REITs.

     Under the Internal Revenue Code, a REIT is subject to a 100% tax on its net income derived from “prohibited transactions.” The phrase “prohibited transactions” refers to the sales of inventory or assets held primarily for sale to customers in the ordinary course of a taxpayer’s business. A taxpayer who engages in such sales is typically referred to as a dealer. If the Internal Revenue Service does not respect the legal structure of certain of our third party loan origination programs (see “Business—Loan Origination, Acquisition and Underwriting —Third-Party Originations”), we may be subject to the prohibited transactions tax on any net income derived from these origination programs.

A portion of our income from assets held directly by or through a qualified REIT subsidiary that is classified as a taxable mortgage pool may represent “phantom” taxable income.

     A portion of our income from a qualified REIT subsidiary that would otherwise be classified as a taxable mortgage pool may be treated as “excess inclusion income,” which would be subject to the distribution requirements that apply to us and could therefore adversely affect our liquidity. Generally, a stockholder’s share of excess inclusion income would not be allowed to be offset by any operating losses otherwise available to the stockholder. Tax exempt entities that own shares in a REIT must treat their allocable share of excess inclusion income as unrelated business taxable income. A REIT must also pay federal tax, at the highest corporate marginal tax rate, on any excess inclusion income allocated to disqualified organizations (e.g., governmental agencies and tax exempt organizations not subject to the tax on unrelated business income). Any portion of a REIT dividend paid to foreign stockholders that is allocable to excess inclusion income will not be eligible for exemption from the 30% withholding tax (or reduced treaty rate) on dividend income.

We may pay distributions that are in excess of our current and accumulated earnings and profits, which may cause our stockholders to incur future adverse federal income tax consequences.

     We may pay quarterly distributions to our stockholders in excess of 100% of our estimated REIT taxable net income. Distributions in excess of our current and accumulated earnings and profits are not treated as a dividend and generally will not be taxable to a taxable U.S. stockholder under current U.S. federal income tax law to the extent those distributions do not exceed the stockholder’s adjusted tax basis in his or her common stock. Instead, any such distribution generally will constitute a return of capital, which will reduce the stockholder’s adjusted basis and could result in the recognition of increased gain or decreased loss to the stockholder upon a sale of the stockholder’s stock.

Other Risks

We operate in a highly regulated industry and failure to comply with applicable laws and regulations at the federal, state or local level could negatively affect our business.

     We conduct loan origination activities for third parties and conduct servicing operations in many states. Most states where we operate require that we comply with a complex set of laws and regulations. These laws, which include installment sales laws, consumer lending laws, mortgage lending laws and mortgage servicing laws, differ from state to state, making uniform operations difficult. Most states periodically conduct examinations of our contracts and loans for compliance with state laws. In addition to state laws regulating our business, consumer-lending and servicing activities are subject to numerous federal laws and the rules and regulations promulgated there-under.

     These federal and state laws and regulations and other laws and regulations affecting our business, including zoning, density and development requirements and building and environmental rules and regulations, create a complex framework in which we originate and service manufactured housing loans. Moreover, because these laws and regulations are constantly changing, it is difficult to comprehensively identify, accurately interpret, properly program our technology systems and effectively train our personnel with respect to all of these laws and regulations, thereby potentially increasing our exposure to the risks of noncompliance with these laws and regulations. As a result, we have not always been, and may not always be, in compliance with these requirements, including licensing requirements.

     Our failure to comply with these laws and regulations can lead to:

•		defaults under contracts we have with third parties, which could cause those contracts to be terminated or renegotiated on less favorable terms;
•		civil fines and penalties and criminal liability;
•		loss of licenses, exemptions or other approved status, which could in turn require us temporarily or permanently to cease our affected operations;
•		demands for indemnification, loan repurchases or modification of our loans;
•		class action lawsuits; and
•		administrative enforcement actions.

The increasing number of federal, state and local ''anti-predatory lending’’ laws may restrict our ability to originate loans on behalf of third parties or increase our risk of liability with respect to certain manufactured housing loans and could increase our cost of doing business.

     In recent years, several federal, state and local laws, rules and regulations have been adopted, or are under consideration, that are intended to eliminate so-called ''predatory’’ lending practices. These laws, rules and regulations impose certain restrictions on loans on which certain points and fees or the annual percentage rate, or APR, exceeds specified thresholds. Some of these restrictions expose a lender to risks of litigation and regulatory sanction no matter how carefully a loan is underwritten. In addition, an increasing number of these laws, rules and regulations seek to impose liability for violations on purchasers of loans, regardless of whether a purchaser knew of or participated in the violation. It is against our policy to engage in predatory lending practices and we have generally avoided originating loans that exceed the APR or ''points and fees’’ thresholds of these laws, rules and regulations. These laws, rules and regulations may prevent us from making certain loans and may cause us to reduce the APR or the points and fees on loans that we do make. In addition, the difficulty of managing the risks presented by these laws, rules and regulations may decrease the availability of warehouse financing and the overall demand for our loans in the secondary market, making it difficult to fund, sell or securitize our loans. If nothing else, the growing number of these laws, rules and regulations will increase our cost of doing business as we are required to develop systems and procedures to ensure that we do not violate any aspect of these new requirements.

The market price of our common stock has significantly declined and may continue to do so.

     We have been affected by the current volatility in the stock market. The market price of our common stock may be further affected by our announcement regarding the cessation of our loan origination activities for our own account. We cannot predict the effect, if any, of future sales of shares of our common stock (including outstanding stock purchase warrants and shares of common stock issuable upon the exercise of currently outstanding options, and non-vested shares issued under our 2003 Equity Incentive Plan), or the availability of shares for future sales, or the market price of our common stock. We also may issue from time to time additional shares of common stock and we may grant registration rights in connection with these issuances. Sales of substantial amounts of shares of common stock or the perception that these sales could occur may adversely affect the prevailing market price for our common stock. In addition, the sale of these shares could impair our ability to raise capital through a sale of additional equity securities.

Our rights and the rights of our stockholders to take action against our directors are limited, which could limit stockholders’ recourse in the event of certain actions.

     Our certificate of incorporation limits the liability of our directors for money damages for breach of a fiduciary duty as a director, except under limited circumstances. As a result, we and our stockholders may have more limited rights against our directors than might otherwise exist. Our bylaws require us to indemnify each director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by reason of his or her service to us. In addition, we may be obligated to fund the defense costs incurred by our directors and officers.

Our board of directors may change our investment and operational policies and practices without a vote of our stockholders, which limits stockholder control of our policies and practices.

     Our major policies, including our policies and practices with respect to our operations, investments, financing, growth, debt capitalization, REIT qualifications and distributions, are determined by our Board of Directors. Our Board of Directors may amend or revise these and other policies from time to time without a vote of our stockholders. Accordingly, our stockholders will have limited control over changes in our policies.

Certain provisions of Delaware law and our governing documents may make it difficult for a third-party to acquire us.

     9.25% Ownership Limit. In order to qualify and maintain our qualification as a REIT, not more than 50% of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer individuals. Thus, ownership of more than 9.25% of our outstanding shares of common stock by any single stockholder has been restricted, with certain exceptions, for the purpose of maintaining our qualification as a REIT under the Internal Revenue Code.

     The 9.25% ownership limit, as well as our ability to issue additional shares of common stock or shares of other stock (which may have rights and preferences over the common stock), may discourage a change of control of the Company and may also: (1) deter tender offers for the common stock, which offers may be advantageous to stockholders; and (2) limit the opportunity for stockholders to receive a premium for their common stock that might otherwise exist if an investor were attempting to assemble a block of common stock in excess of 9.25% of the outstanding shares of the Company or otherwise effect a change of control of the Company.

     Preferred Stock. Our charter authorizes the Board of Directors to issue up to 10,000,000 shares of preferred stock and to establish the preferences and rights (including the right to vote and the right to convert into shares of common stock) of any shares issued. The power to issue preferred stock could have the effect of delaying or preventing a change in control of the Company even if a change in control were in the stockholders’ interest.

     Section 203. Section 203 of the Delaware General Corporation Law is applicable to certain types of corporate takeovers. Subject to specified exceptions listed in this statute, Section 203 of the Delaware General Corporation Law provides that a corporation may not engage in any “business combination” with any “interested stockholder” for a three-year period following the date that the stockholder becomes an interested stockholder. Although these provisions do not apply in certain circumstances, the provisions of this section could discourage offers from third parties to acquire us and increase the difficulty of successfully completing this type of offer.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

     Our executive offices are located in approximately 25,000 square feet of leased space at 27777 Franklin Road, Suite 1700 and Suite 1640, Southfield, Michigan 48034. The lease, which terminates on August 31, 2011, provides for monthly rent of approximately $47,000. Certain of our officers and directors own interests in the company from which we lease our executive offices.

     We also lease office space for our offices in other locations. We currently have a lease expiring in July 2009 for approximately 3,800 square feet of office space in Glen Allen, Virginia with a current monthly rent of approximately $6,000; and a lease expiring in June 2012 for approximately 42,000 square feet of office space in Fort Worth, Texas with a current monthly rent of approximately $33,000.

ITEM 3. LEGAL PROCEEDINGS

     We are involved in various legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material adverse impact on our results of operations or financial condition.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable

PART II

ITEM 5.		MARKET FOR THE COMPANY’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

     Our common stock has been listed on the Nasdaq National Market (“Nasdaq”) since May 5, 2004 under the symbol “ORGN.” On February 29, 2008, the closing sales price of our common stock was $2.90 per share and the common stock was held by approximately 68 holders of record. The following table presents the per share high and low prices of our common stock for the periods indicated as reported by the Nasdaq National Market. The stock prices reflect inter-dealer prices, do not include retail mark-ups, mark-downs or commissions and may not necessarily represent actual transactions.

		High				Low
Fiscal Year Ended December 31, 2006
First quarter		$	7.24			$	5.95
Second quarter		$	6.79			$	5.74
Third quarter		$	6.48			$	5.61
Fourth quarter		$	6.99			$	5.27
Fiscal Year Ended December 31, 2007
First quarter		$	7.35			$	5.45
Second quarter		$	7.40			$	6.50
Third quarter		$	7.22			$	5.64
Fourth quarter		$	6.16			$	3.78

     The following table presents the distributions per common share that were paid with respect to each quarter for 2006 and 2007.

		Distribution
		per share
Fiscal Year Ended December 31, 2006
First quarter		$	0.03
Second quarter		$	0.03
Third quarter		$	0.03
Fourth quarter		$	0.04	(1)
Fiscal Year Ended December 31, 2007
First quarter		$	0.06
Second quarter		$	0.08
Third quarter		$	0.09
Fourth quarter			—

     In order to qualify for the tax benefits accorded to REITs under the Internal Revenue Code, we must, and we intend to, make distributions to our stockholders each year in an amount at least equal to (i) 90% of our REIT taxable net income (before the deduction for dividends paid and not including any net capital gain), plus (ii) 90% of the excess of our net income from foreclosure property over the tax imposed on such income by the Internal Revenue Code, minus (iii) any excess non-cash income. Differences in timing between the receipt of income and the payment of expenses and the effect of required debt amortization payments could require us to borrow funds on a short-term basis, access the capital markets or liquidate investments to meet this distribution requirement.

     The actual amount and timing of distributions will be at the discretion of our Board of Directors and will depend upon our actual results of operations. To the extent not inconsistent with maintaining our REIT status, we may

maintain accumulated earnings of our taxable REIT subsidiaries in those subsidiaries.

     In the future, our Board of Directors may elect to adopt a dividend reinvestment plan.

Equity Compensation Plan Information

     The following table reflects information about the securities authorized for issuance under our equity compensation plans as of December 31, 2007.

(a)

(b)

(c)

Number of securities

Number of

remaining available for

securities to be

Weighted-average

future issuance under

issued upon exercise

exercise price of

equity compensation

of outstanding

outstanding

plans (excluding

options, warrants

options, warrants

securities reflected in

Plan Category

and rights

and rights

column (a))

Equity compensation plans approved by shareholders

202,000

$

10.00

217,676

Equity compensation plans not approved by shareholders

N/A

N/A

N/A

Total

202,000

$

10.00

217,676

Stockholder Return Performance Presentation

     Set forth below is a line graph comparing the yearly percentage change in the cumulative total stockholder return on our common stock against the cumulative total return of a broad market index composed of all issuers listed on the Nasdaq National Market (NASDAQ) and the SNL Finance REITs Index for the period beginning on May 5, 2004 (the date of our initial public offering) and ending on December 31, 2007. This line graph assumes a $100 investment on May 5, 2004, a reinvestment of dividends and actual decrease of the market value of our common stock relative to an initial investment of $100. The comparisons in this table are required by the applicable SEC regulations and are not intended to forecast or be indicative of possible future performance of our common stock.

	Index			05/05/04					12/31/04					12/31/05					12/31/06					12/31/07
	Origen Financial, Inc.				100.00					97.60					95.84					93.62					57.12
	NASDAQ Composite				100.00					111.15					112.67					123.40					135.51
	SNL Finance REIT Index				100.00					127.38					101.92					129.10					80.29

ITEM 6. SELECTED FINANCIAL DATA

		Origen Financial, Inc.																				Origen Financial L.L.C. (4)
																		Period from
																		October 8				Period from
		Year Ended				Year Ended				Year Ended				Year Ended				through				January 1
		December 31,				December 31,				December 31,				December 31,				December 31,				through October 7,
		2007				2006				2005				2004				2003 (1)				2003
		(dollars in thousands, except for per-share data)
Operating Statement Data:
Interest income on loans		$	92,127			$	74,295			$	59,391			$	42,479			$	7,339			$	16,398
Gain on sale and securitization of loans			—				—				—				—				—				28
Servicing and other revenues			22,040				17,787				14,651				11,184				2,880				7,329
Total revenue			114,167				92,082				74,042				53,663				10,219				23,755
Interest expense			59,758				43,498				28,468				15,020				2,408				11,418
Provisions for loan loss, recourse liability and write down of residual interest			8,739				7,069				13,633				10,210				768				9,849
Distribution of preferred interest			—				—				—				—				—				1,662
Goodwill impairment			32,277				—				—				—				—				—
Other operating expenses			45,100				34,566				34,600				31,399				5,546				24,754
Total expenses			145,874				85,133				76,701				56,629				8,722				47,683
Income (loss) before income taxes and cumulative effect of change in accounting principle			(31,707	)			6,949				(2,659	)			(2,966	)			1,497				(23,928	)
Provision for income taxes(2)			60				24				—				—				—				—
Cumulative effect of change in accounting principle			—				46				—				—				—				—
Net income (loss)		$	(31,767	)		$	6,971			$	(2,659	)		$	(2,966	)		$	1,497			$	(23,928	)
Earning (loss) per share — Diluted(3)		$	(1.26	)		$	0.28			$	(0.11	)		$	(0.14	)		$	0.10			$	—
Distributions paid per share		$	0.27			$	0.09			$	0.22			$	0.35				0.098				—
Balance Sheet Data:
Loans receivable, net of allowance for losses		$	1,193,916			$	950,226			$	768,410			$	563,268			$	368,040			$	279,300
Servicing rights			2,146				2,508				3,103				4,097				5,131				5,892
Retained interests in loan securitizations			—				—				—				724				749				785
Goodwill			—				32,277				32,277				32,277				32,277				18,332
Cash and other assets			88,139				88,056				89,213				82,181				37,876				22,894
Total assets		$	1,284,201			$	1,073,067			$	893,003			$	682,547			$	444,073			$	327,203
Total debt			1,089,968				842,300				669,708				455,914				277,441				273,186
Preferred interest in subsidiary			—				—				—				—				—				45,617
Other liabilities			45,848				26,303				23,344				23,167				24,312				22,345
Members’/Stockholders’ Equity/Capital			148,385				204,464				199,951				203,466				142,320				(13,945	)
Other Information
Cash Flow Data: (provided by/(used in))
From operating activities		$	23,056			$	16,287			$	18,167			$	8,606			$	(8,841	)		$	(7,642	)
From investing activities			(253,997	)			(193,265	)			(229,183	)			(245,125	)			(85,665	)			(112,547	)
From financing activities			239,166				171,238				210,030				238,886				100,254				121,110
Selected Ratios
Return on average assets			(2.70	)%			0.70	%			(0.33	)%			(0.52	)%			1.43	%			(8.52	)%
Return on average equity			(18.01	)%			3.45	%			(1.29	)%			(1.56	)%			4.21	%			(1352.96	)%
Average equity to average assets			14.97	%			20.29	%			25.63	%			33.03	%			33.91	%			0.63	%

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion and analysis of the consolidated financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto.

     Management’s discussion and analysis of financial condition and results of operations and liquidity and capital resources contained within this Form 10-K is more clearly understood when read in conjunction with our historical financial statements and the related notes. The notes to the financial statements provide information about us, as well as the basis for presentation used in this Form 10-K.

Overview

     In October 2003, we began operations upon the acquisition of all of the equity interests of Origen Financial L.L.C. We also took steps to qualify Origen Financial, Inc. as a REIT. In the second quarter of 2004, we completed the initial public offering of our common stock. Currently, most of our operations are conducted through Origen Financial L.L.C., our wholly-owned subsidiary. We conduct the rest of our business operations through our other wholly-owned subsidiaries, including taxable REIT subsidiaries, to take advantage of certain business opportunities and ensure that we comply with the federal income tax rules applicable to REITs.

     In May 2007, we completed a securitization of approximately $200.4 million in principal balance of manufactured housing loans. The securitization was accounted for as a financing. As part of the securitization we, through a special purpose entity, issued $184.4 million in notes payable. Additional credit enhancement was provided by a guaranty from Ambac Assurance Corporation. The notes are stratified into two different classes. The Class A-1 notes pay interest at one month LIBOR plus 19 basis points and have a contractual maturity date of April 2037. The Class A-2 notes pay interest based on a rate established by the auction agent at each rate determination date and have a contractual maturity date of April 2037. Approximately $182.4 million of the proceeds was used to reduce the aggregate balance of notes outstanding under our Citigroup warehouse facility.

     In September 2007, we, through our primary operating subsidiary, Origen Financial L.L.C., entered into a $15 million secured financing arrangement with the William M. Davidson Trust u/a/d 12/13/04 (the “Lender”), an affiliate of one of our principal stockholders (the “Bridge Financing”). The Lender is a grantor revocable trust established by William M. Davidson as the grantor. Mr. Davidson is the sole member of Woodward Holding, LLC, which owns approximately 6.8% of our common stock. The Bridge Financing includes a senior secured promissory note (the “Note”) and a senior secured convertible promissory note (the “Convertible Note”). The Note and the Convertible Note are each one-year secured notes bearing interest at 8% per year and are secured by a portion of our rights to receive servicing fees on our loan servicing portfolio. The Note, which has an original principal amount of $10 million, and the Convertible Note, which has an original principal amount of $5 million, are each due on September 11, 2008. The term of the Note and the Convertible Note may be extended up to 120 days with the payment of additional fees. The Convertible Note may be converted at the option of the Lender into shares of our common stock at a conversion price of $6.237 per share. In connection with the Bridge Financing, we issued a stock purchase warrant to the Lender. The stock purchase warrant is a five-year warrant to purchase 500,000 shares of our common stock at an exercise price of $6.16 per share.

     In October 2007, we completed a securitization of approximately $140.0 million in principal balance of manufactured housing loans. The securitization was accounted for as a financing. As part of the securitization we through a special purpose entity, issued $126.7 million of a single AAA rated floating rate class of asset-backed notes to a single qualified institutional buyer pursuant to Rule 144A under the Securities Act of 1933. Additional credit enhancement was provided by a guaranty from Ambac Assurance Corporation. The notes pay interest at one month LIBOR plus 120 basis points. Approximately $122.4 million of the proceeds was used to reduce the aggregate balance of notes outstanding under our Citigroup warehouse facility.

Developments Based on Current Adverse Market Conditions

     Recent and current conditions in the credit markets have adversely impacted our business and financial condition. During 2007, the credit markets that we depend on for warehouse lending for originations and for securitization of our originated loans, as well as the whole loan market for acquisition of loans we originate, deteriorated. This situation began with problems in the sub-prime loan market and subsequently has had the same effect on lenders and investors in asset classes other than sub-prime mortgages, such as our manufactured housing loans.

     Despite actions by the Federal Reserve Bank to lower interest rates and increase liquidity, uncertainty among lenders and investors has continued to reduce liquidity, drive up the cost of lending and drive down the value of assets in these markets. The specific effects are that banks and other lenders have reported large losses, have demanded that borrowers reduce the credit exposure to these assets resulting in “margin calls” or reductions in borrowing availability, and have caused massive sales of underlying assets that collateralize the loans. The consequence of these sales has been further downward pressure on market values of the underlying assets, such as our manufactured housing loans, despite the continued high intrinsic quality of our loans in terms of borrower creditworthiness and low rates of delinquencies, defaults and repossessions.

     Our business model depends on the availability of credit, both for the funding of newly originated loans and for the periodic securitization of pools of loans that have been originated and funded by short-term borrowings from warehouse lenders. The securitization process permits us to sell bonds secured by the loans we have originated. The proceeds from the bond sales are used to pay off the warehouse lenders and recharge the availability of funding for newly originated loans.

     If warehouse funding is not available, or is available only on terms that do not permit us to profit from loan origination, our origination of loans for our own account only can be continued at a loss. If there is no market for securitization at rates of interest and leverage levels acceptable to us, our only alternative for satisfying our obligations under our warehouse line is to sell the manufactured housing loans. If purchasers are unwilling to pay at least the full amount advanced to borrowers plus all related fees and costs, sales of loans are not profitable for us.

          As a result of these conditions:

	•		Because of the unavailability of a profitable financing in the securitization market, on March 14, 2008, we sold our portfolio of approximately $174.6 million in aggregate principal balance of unsecuritized loans with a carrying value of $175.7 million for approximately $155.0 million.
	•		We used the proceeds of the loan sale primarily to pay off the outstanding loan balance of approximately $146.4 million on our warehouse credit facility, which expired on March 14, 2008.
	•		Because of the absence of a profitable exit in the securitization market and reduced pricing in the whole loan market, we suspended originating loans for our own account until these markets recover. We will, however, continue to provide loan origination services for third-parties.
	•		Our stock price has steadily declined to a point where it is well below its tangible net book value. As a consequence, we recorded a non-cash impairment charge, writing off our entire goodwill of $32.3 million in December 2007.
	•		In February 2008, to satisfy our warehouse lender, we sold an asset-backed bond for $22.5 million, in order to fully pay off $19.6 million of repurchase agreements secured by this bond and three others that we continue to hold. Sale of this bond resulted in our recording an asset impairment charge of $9.2 million in 2007.
	•		Our lender under our supplemental advance credit facility secured by a pledge of our residual interests in our securitizations has agreed to extend the due date of the facility until June 13, 2008. This facility otherwise would have expired on March 14, 2008 and we would have been obligated to repay approximately $50 million outstanding under the facility.

•

On March 13, 2008, we decreased our work force by 16% to reduce costs that were associated with originating loans for our own account.

     We believe that these actions were necessitated by and are a result of the market conditions described above. We do not believe that the actions reflect on the quality of our continuing business operations or the credit performance or long-term realizable value of our loan portfolio, which in our opinion continues to remain very high.

Going Concern

     Our audited financial statements for the fiscal year ended December 31, 2007, were prepared under the assumption that we will continue our operations as a going concern. Our registered independent accountants in their audit report have expressed substantial doubt about our ability to continue as a going concern. Continued operations depend on our ability to meet our existing debt obligations. Based on the intrinsic value of our assets and discussions we have had with third parties about possible strategic alternatives, we believe we will be able to raise the additional funds we need on a timely basis, but such funds may not be available or may not be available on reasonable terms.

Critical Accounting Policies

     Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures. On an on-going basis, we evaluate these estimates, including those related to reserves for credit losses, recourse liabilities, servicing rights and retained interests in loans sold and securitized. Estimates are based on historical experience, information received from third parties and on various other assumptions that are believed to be reasonable under the circumstances, which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under conditions different from our assumptions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Securitizations Structured as Financings

     We engage in securitizations of our manufactured housing loan receivables. We have structured all loan securitizations occurring since 2003 as financings for accounting purposes under Statement of Financial Accounting Standards No. 140 (“SFAS 140”), “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities — a replacement of FASB Statement No. 125.” In the future, we intend to account for our securitizations as financings. When a loan securitization is structured as a financing, the financed asset remains on our books along with the recorded liability that evidences the financing, typically bonds. Income from both the loan interest spread and the servicing fees received on the securitized loans are recorded into income as earned. An appropriate allowance for credit losses is maintained on the loans. Deferred debt issuance costs and discount related to the bonds are amortized on a level yield basis over the estimated life of the bonds.

Investments

     Except for debt securities acquired with evidence of deterioration of credit quality since origination, which are accounted for as described below, we follow the provisions of Statement of Financial Accounting Standards No. 115 (“SFAS 115”), “Accounting For Certain Investments in Debt and Equity Securities,” in reporting our investments. The investments are classified as either available-for-sale or held-to-maturity. Investments classified as available-for sale are carried at fair value. Unrealized gains and losses related to these investments are included in accumulated other comprehensive income. Investments classified as held-to-maturity are carried on our balance sheet at amortized cost. All investments are regularly measured for impairment. Management uses its judgment to determine whether an investment has sustained an other-than-temporary decline in value. If management determines that an investment has sustained an other-than-temporary decline in its value, the investment is written down to its fair value by a charge to earnings, and we establish a new cost basis for the investment. If a security that is available for sale sustains an other-than-temporary impairment, the identified impairment is reclassified from accumulated other comprehensive income to earnings, thereby establishing a new cost basis. Our evaluation of an other-than-temporary decline is dependent on the specific facts and circumstances. Factors that we consider in determining whether an other-than-temporary decline in value has occurred include: the estimated fair value of the investment in relation to its cost basis; the financial condition of the related entity; and the intent and ability to retain the investment for a sufficient period of time to allow for recovery in the fair value of the investment.

Loans Receivable

     Loans receivable consist of manufactured housing loans under contracts collateralized by the borrowers’ manufactured houses and in some instances, related land. Generally, loans receivable are classified as held for investment and are carried at amortized cost, except for loans purchased with evidence of deterioration of credit quality since origination, which are described below. Periodically, we identify loans we expect to sell prior to maturity. When loans are identified to be sold, they are reclassified as held for sale and reported at the lower of cost or market. Included in a loan’s cost are unearned deferred fees and cost and the allowance for loan losses relating to the loans held for sale. The fair value of loans classified as held for sale is based on market prices. If market prices are not readily available, fair value is based on discounted cash flow models, which considers expected prepayment factors and the degree of credit risk associated with the loans and the estimated effects of changes in market interest rates relative to the loans interest rates. We do not amortize basis adjustments, including deferred loan origination costs, fees and discounts and premiums on loans held for sale. Interest on loans is credited to income when earned. Loans held for investment include accrued interest and are presented net of deferred loan origination fees and costs and an allowance for estimated loan losses. All of our loans receivable were classified as held for investment at December 31, 2007 and 2006.

Allowance for Loan Losses

     Determining an appropriate allowance for loan losses involves a significant degree of estimation and judgment. The process of estimating the allowance for loan losses may result in either a specific amount representing the impairment estimate or a range of possible amounts. Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies,” provides guidance on accounting for loan losses associated with pools of loans and requires the accrual of a loss when it is probable that an asset has been impaired and the amount of the loss can be reasonably estimated. Our loan portfolio is comprised of manufactured housing loans with an average loan balance of approximately $49,000 at December 31, 2007. The allowance for loan losses is developed at the portfolio level and the amount of the allowance is determined by establishing a calculated range of probable losses. A lower range of probable losses is calculated by applying historical loss rate factors to the loan portfolio on a stratified basis using current portfolio performance and delinquency levels (0-30 days, 31-60 days, 61-90 days and greater than 90 days delinquent). An upper range of probable losses is calculated by the extrapolation of probable loan impairment based on the correlation of historical losses by vintage year of origination. Financial Accounting Standards Board Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss—an interpretation of FASB Statement No. 5,” states that a creditor should recognize the amount that is the best estimate within the estimated range of loan losses. Accordingly, the determination of an amount within the calculated range of losses is in recognition of the fact that historical charge-off experience, without adjustment, may not be representative of current impairment of the current portfolio of loans because of changed circumstances. Such changes may relate to changes in the age of loans in the portfolio, changes in the creditor’s underwriting standards, changes in economic conditions affecting borrowers in a geographic region, or changes in the business climate in a particular industry.

Loan Pools and Debt Securities Acquired with Evidence of Deterioration of Credit Quality

     We account for loan pools and debt securities acquired with evidence of deterioration of credit quality at the time of acquisition in accordance with the provisions of the American Institute of Certified Public Accountants (“AICPA”) Statement of Position 03-3 (“SOP 03-3”), “Accounting for Certain Loans or Debt Securities Acquired in a Transfer”. The carrying values of such purchased loan pools and debt securities were approximately $25.6 million and $3.5 million, respectively, at December 31, 2007 and $29.6 million and $3.6 million, respectively, at December 31, 2006, and are included in loans receivable and investments held to maturity, respectively, in the consolidated balance sheet.

     We adopted the provisions of SOP 03-3 in January 2005 and apply those provisions to loan pools and debt securities acquired after December 31, 2004. Under the provisions of SOP 03-3, each static pool of loans and debt securities is statistically modeled to determine its projected cash flows. We consider historical cash collections for loan pools and debt securities with similar characteristics as well as expected prepayments and estimate the amount and timing of undiscounted expected principal, interest and other cash flows for each pool of loans and debt security. An internal rate of return is calculated for each static pool of receivables based on the projected cash flows and applied to the balance of the static pool. The resulting revenue recognized is based on the internal rate of return applied to the remaining balance of each static pool of accounts. Each static pool is analyzed at least quarterly to assess the actual performance compared to the expected performance. To the extent there are differences in actual

performance versus expected performance, the internal rate of return is adjusted prospectively to reflect the revised estimate of cash flows over the remaining life of the static pool. Beginning January 2005, if revised cash flow estimates are less than the original estimates, SOP 03-3 requires that the internal rate of return remain unchanged and an immediate impairment be recognized. For loans acquired with evidence of deterioration of credit quality, if cash flow estimates increase subsequent to recording an impairment, SOP 03-3 requires reversal of the previously recognized impairment before any increases to the internal rate of return are made. For any remaining increases in estimated future cash flows for loan pools or debt securities acquired with evidence of deterioration of credit quality, we adjust the amount of accretable yield recognized on a prospective basis over the remaining life of the loan pool or debt security.

     Application of the interest method of accounting requires the use of estimates to calculate a projected internal rate of return for each pool. These estimates are based on historical cash collections. If future cash collections are materially different in amount or timing than projected cash collections, earnings could be affected, either positively or negatively. Higher collection amounts or cash collections that occur sooner than projected cash collections will have a favorable impact on yields and revenues. Lower collection amounts or cash collections that occur later than projected cash collections will have an unfavorable impact and result in an immediate impairment being recognized.

Derivative Financial Instruments

     We have periodically used derivative instruments, primarily interest rate swaps, in order to mitigate interest rate risk or the variability of cash flows to be paid, related to our loans receivable and anticipated securitizations. We follow the provisions of Statement of Financial Accounting Standards No. 133 (“SFAS 133”), “Accounting for Derivative Instruments and Hedging Activities” (as amended by Statement of Financial Accounting Standards No. 149). All derivatives are recorded on the balance sheet at fair value. On the date a derivative contract is entered into, we designate the derivative as a hedge of either a forecasted transaction or the variability of cash flow to be paid (“cash flow” hedge). Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in other comprehensive income until earnings are affected by the forecasted transaction or the variability of cash flow and are then reported in current earnings. Any ineffectiveness is recorded in current earnings.

     We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objectives and strategy for undertaking the hedge transaction. This process includes linking cash flow hedges to specific forecasted transactions or variability of cash flow.

     We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, we discontinue hedge accounting prospectively, in accordance with SFAS 133.

     Derivative financial instruments that do not qualify for hedge accounting are carried at fair value and changes in fair value are recognized currently in earnings.

Share-Based Compensation

     In connection with our formation, we adopted an equity incentive plan. We follow the provisions of Statement of Financial Accounting Standards No. 123 revised (“SFAS 123(R)”), “Share-Based Payment,” which we adopted on January 1, 2006, using the modified-prospective transition method, in order to account for our equity incentive plan. In connection with the adoption of SFAS 123(R), we recorded a cumulative effect of a change in accounting principle in the amount of $46,000 to reflect the change in accounting for forfeitures. Results for prior periods have not been restated. SFAS 123(R) addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. Under this pronouncement, all forms of share-based payments to employees, including employee stock options, are treated the same as other forms of compensation by recognizing the related cost in the income statement. The expense of the award would generally be measured at fair value at the grant date. The fair value of

each option granted would be determined using a binomial option-pricing model based on assumptions related to annualized dividend yield, stock price volatility, risk free rate of return and expected average term. Prior to January 1, 2006, as permitted under the provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” as amended, we chose to recognize compensation expense using the intrinsic value-based method of valuing stock options prescribed in APB No. 25, “Accounting for Stock Issued to Employees” and related interpretations. Under the intrinsic value-based method, compensation cost is measured as the amount by which the quoted market price of our common stock at the date of grant exceeds the stock option exercise price. All options we granted prior to the adoption of SFAS 123(R) were granted at a fixed price not less than the market value of the underlying common stock on the date of grant and, therefore, were not included in compensation expense, prior to the adoption of SFAS 123(R).

Goodwill Impairment

     As a result of the acquisition of Origen Financial L.L.C., our predecessor company, on October 8, 2003, which was accounted for as a purchase, we recorded the net assets acquired at fair value, which resulted in recording goodwill of $32.3 million.

     In accordance with SFAS 142, “Goodwill and Other Intangible Assets,” we test goodwill for impairment on an annual basis in the fourth quarter, or more frequently if we believe indicators of impairment exist. For purposes of testing goodwill impairment, we have determined that with respect to our recorded goodwill, we are a single reporting unit. The performance of the impairment test involves a two-step process. The first step of the impairment test involves comparing our fair value with our aggregate carrying value, including goodwill. The initial and ongoing estimate of our fair value is based on assumptions and projections prepared by us. If our carrying amount exceeds our fair value, we perform the second step of the goodwill impairment test in order to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the goodwill with the carrying value of that goodwill.

     We performed our annual impairment test of goodwill on December 31, 2007, based on conditions as of December 31, 2007, in accordance with SFAS 142, and determined that our recorded goodwill was fully impaired. The impairment was due to current market and economic conditions which have resulted in a further and extended decline in the quoted market price of our equity securities below tangible book value. As a result, we recorded a non-cash goodwill impairment charge of $32.3 million during the year ended December 31, 2007. No impairment was recorded during the years ended December 31, 2006 or 2005.

Income Taxes

     We have elected to be taxed as a REIT as defined under Section 856(c)(1) of the Internal Revenue Code of 1986, as amended (the “Code”). In order for us to qualify as a REIT, at least ninety-five percent (95%) of our gross income in any year must be derived from qualifying sources. In addition, a REIT must distribute at least ninety percent (90%) of its REIT taxable net income to its stockholders.

     Qualification as a REIT involves the satisfaction of numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes occur in the area of REIT taxation, which requires us to continually monitor our tax status.

     We continuously monitor our compliance with the requirements for qualification as a REIT, and we believe that we met such requirements for the taxable year ended December, 31, 2007. However, there is no assurance that the Internal Revenue Service will not decide differently.

     As a REIT, we generally will not be subject to U.S. federal income taxes at the corporate level on the ordinary taxable income we distribute to our stockholders as dividends. If we fail to qualify as a REIT in any taxable year, our taxable income will be subject to U.S. federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if we qualify as a REIT, we may be subject to certain state and local income taxes

and to U.S. federal income and excise taxes on our undistributed taxable income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries, if any, is subject to federal and state income taxes. An income tax allocation is required to be estimated on our taxable income generated by our taxable REIT subsidiaries. Deferred tax components arise based upon temporary differences between the book and tax basis of items such as the allowance for loan losses, accumulated depreciation, share-based compensation and goodwill.

Financial Condition

December 31, 2007 Compared to December 31, 2006

     At December 31, 2007 and 2006 we held loans representing approximately $1,196.0 million and $956.6 million of principal balances, respectively. Net loans outstanding constituted approximately 93% and 88% of our total assets at December 31, 2007 and 2006, respectively. Approximately $325.5 million of the loans on our balance sheet at December 31, 2007 were included in either our May 2007 or our October 2007 securitization, and will continue to be carried on our balance sheet as the securitization transactions were structured as financings.

     In May 2007 we completed our 2007-A securitization of approximately $200.4 million in principal balance of manufactured housing loans.

     In October 2007 we completed our 2007-B securitization of approximately $140.0 million in principal balance of manufactured housing loans.

     New loan originations for the year ended December 31, 2007 increased 21.9% to $344.6 million compared to $282.7 million for the year ended December 31, 2006. We additionally processed $111.6 million and $49.6 million in loans originated under third-party origination agreements for the years ended December 31, 2007 and 2006, respectively.

     The carrying amount of loans receivable consisted of the following at December 31 (in thousands):

		2007				2006
Manufactured housing loans — held for investment, securitized		$	1,051,015			$	825,811
Manufactured housing loans — held for investment, unsecuritized			144,926				130,828
Accrued interest receivable			5,608				4,840
Deferred loan origination costs			5,612				1,271
Discount on purchased loans			(4,450	)			(3,155	)
Allowance for purchased loans			(913	)			(913	)
Allowance for loan losses			(7,882	)			(8,456	)
		$	1,193,916			$	950,226

     The following table sets forth the average individual loan balance, weighted average loan yield, and weighted average initial term at December 31 (dollars in thousands):

		2007				2006
Number of loans receivable			24,416				20,300
Average loan balance		$	49			$	47
Weighted average loan coupon (1)			9.45	%			9.50	%
Weighted average initial term		20 years				20 years

     Delinquency statistics for the loan receivable portfolio at December 31 are as follows (dollars in thousands):

		2007												2006
		No. of				Principal				% of				No. of				Principal				% of
Days delinquent		Loans				Balance				Portfolio				Loans				Balance				Portfolio
31— 60			268			$	9,451				0.8	%			248			$	9,354				1.0	%
61— 90			84				3,496				0.3	%			86				3,159				0.3	%
Greater than 90			170				7,484				0.6	%			131				5,416				0.6	%

     We define non-performing loans as those loans that are 90 or more days delinquent in contractual principal payments. The average balance of non-performing loans was $5.8 million for the year ended December 31, 2007 compared to $5.7 million for the year ended December 31, 2006. Non-performing loans as a percentage of average outstanding principal balance were 0.7% for the year ended December 31, 2007 compared to 0.6% for the year ended December 31, 2006.

     At December 31, 2007 we held 202 repossessed houses owned by us compared to 145 houses at December 31, 2006, an increase of 57 houses, or 39.3%. The book value of these houses, including repossession expenses, based on the lower of cost or market value, was approximately $5.0 million at December 31, 2007 compared to $3.0 million at December 31, 2006, an increase of $2.0 million, or 66.7%. This increase is the result of a change from selling the repossessed houses in the retail market as opposed to the wholesale market. As a result, we expect to realize increased recovery rates and longer sale periods.

     The allowance for loan losses decreased $0.6 million to $7.9 million at December 31, 2007 from $8.5 million at December 31, 2006. Despite the 26.7% increase in the gross loans receivable balance, net of loans accounted for under SOP 03-3 the allowance for loan losses decreased 7.1% due to consistently lower delinquency and net charge-off rates. The allowance for loan losses as a percentage of gross loans receivable, net of loans accounted for under SOP 03-3, was approximately 0.7% at December 31, 2007 compared to approximately 0.9% at December 31, 2006. Net charge-offs were $9.3 million, or 0.9% of the average outstanding loans receivable balance, and $8.6 million, or 1.0% of the average outstanding loans receivable balance, for the years ended December 31, 2007 and 2006, respectively.

     Changes to our underwriting practices and processes, credit scoring models, systems and servicing techniques beginning in 2002 have resulted in demonstrably superior performance by loans originated in and subsequent to 2002 as compared to loans originated by our predecessors prior to 2002. The pre-2002 loans, despite representing a diminishing percentage of our owned loan portfolio, have had a disproportionate negative impact on our financial performance.

     The following tables indicate the impact of such legacy loans:

Loan Pool Unpaid Principal Balance (dollars in thousands) (1)

						2002 and
		2001 and prior				subsequent
At December 31, 2007
Dollars		$	40,214			$	1,164,524
Percentage of total			3.3	%			96.7	%
At December 31, 2006
Dollars		$	46,612			$	915,329
Percentage of total			4.8	%			95.2	%

Static Pool Performance (dollars in thousands) (1)

						2002 and
		2001 and prior				subsequent
2007
Dollars defaulted		$	3,949			$	15,417
Net losses		$	2,333			$	5,902
2006
Dollars defaulted		$	5,382			$	13,216
Net losses		$	3,977			$	7,042
2005
Dollars defaulted		$	8,752			$	12,272
Net losses		$	6,707			$	5,312

     While representing approximately 3% of the owned loan portfolio at December 31, 2007, the pre-2002 loans accounted for approximately 20% of the defaults and 28% of the losses during 2007. Additionally, recovery rates were substantially lower for the pre-2002 loans leading to higher losses as compared to loans from 2002 and later. Management believes that as these loans become a smaller percentage of the owned loan portfolio, the negative impact on earnings will diminish.

     Through our wholly-owned subsidiary, Origen Servicing, Inc., we provide loan servicing for manufactured housing loans that we and our predecessors have originated or purchased, and for loans originated by third parties. As of December 31, 2007, we serviced approximately $1.8 billion of loans, including approximately $599.1 million of loans serviced for others, as compared to approximately $1.6 billion of loans, including approximately $647.2 million of loans serviced for others, as of December 31, 2006. Included in the loans serviced for others were $113.6 million and $127.9 million of loans as of December 31, 2007, and 2006, respectively, which we or our predecessors originated and subsequently sold in two pre-2003 securitization transactions. As part of our contractual services, certain of our servicing contracts require us to advance uncollected principal and interest payments at a prescribed cut-off date each month to an appointed trustee on behalf of the investors in the loans. We are reimbursed by the trust in the event such delinquent principal and interest payments remain uncollected during the next reporting period. Also, as part of the servicing function, in order to protect the value of the housing asset underlying the loan, we are required to advance certain expenses such as taxes, insurance costs and costs related to the foreclosure or repossession process as necessary. Such expenditures are reported to the appropriate trustee for reimbursement. At December 31, 2007, we had servicing advances outstanding of approximately $6.3 million compared to $7.7 million at December 31, 2006, a decrease of 18.2%.

     As a result of the acquisition of Origen Financial L.L.C., our predecessor company, on October 8, 2003, which was accounted for as a purchase, we recorded the net assets acquired at fair value, which resulted in recording goodwill of $32.3 million. We performed our annual impairment test of goodwill on December 31, 2007, based on conditions as of December 31, 2007, in accordance with SFAS 142, and determined that our recorded goodwill was fully impaired. The impairment was due to current market and economic conditions which have resulted in a further and extended decline in the quoted market price of the Company’s equity securities below tangible book value. As a result, we recorded a non-cash goodwill impairment charge of $32.3 million during the year ended December 31, 2007.

     Bonds outstanding, relating to securitized financings utilizing asset-backed structures, totaled $884.7 million and $685.0 million at December 31, 2007 and 2006, respectively. These bonds relate to seven securitized transactions: Origen 2004-A, issued in February 2004, Origen 2004-B, issued in September 2004, Origen 2005-A, issued in May 2005, Origen 2005-B, issued in December 2005, Origen 2006-A, issued in August 2006, Origen 2007-A, issued in May 2007 and Origen 2007-B, issued in October 2007. Bonds outstanding for each securitized transaction were as follows at December 31 (in thousands):

		Original
		Issuance				2007				2006
Origen 2004 — A		$	200,000			$	95,753			$	113,408
Origen 2004 — B			169,000				96,290				114,443
Origen 2005 — A			165,300				108,318				128,668
Origen 2005 — B			156,187				118,464				137,454
Origen 2006 — A			200,646				169,398				191,040
Origen 2007 — A			184,389				171,588				—
Origen 2007 — B			126,700				124,839				—
		$	1,202,222			$	884,650			$	685,013

     At December 31, 2007 our total borrowings under our warehouse financing facility with Citigroup were $173.1 million compared to $131.5 million at December 31, 2006. We used the Citigroup facility to fund loans we originated or purchased until such time as they could be included in one of our securitization transactions. We used the proceeds of our May 2007 and October 2007 securitizations to reduce borrowings outstanding on the Citigroup facility.

     We previously had a revolving credit facility with JPMorgan Chase Bank, N.A. Under the terms of the facility, which was terminated by us in September 2007, we could borrow up to $4.0 million for the purpose of funding required principal and interest advances on manufactured housing loans that are serviced for outside investors. Borrowings under the facility were repaid upon our collection of monthly payments made by borrowers on such manufactured housing loans. All liens were released as of the termination of the facility. The outstanding balance on the facility was approximately $2.2 million at December 31, 2006.

     Stockholders’ equity was $148.4 million and $204.5 million at December 31, 2007 and 2006, respectively. We had net losses of $31.8 million, including a non-cash goodwill impairment charge of $32.3 million and an investment impairment charge of $9.2 million, other comprehensive losses of $19.4 million and declared and paid distributions of $7.0 million during the year ended December 31, 2007.

Results of Operations for the Years Ended December 31, 2007 and December 31, 2006

     Loan originations increased $61.9 million, or 21.9% to $344.6 million from $282.7 million for the years ended December 31, 2007 and 2006, respectively. We additionally processed $111.6 million and $49.6 million in loans originated under third — party origination agreements during the years ended December 31, 2007 and 2006, respectively. Chattel loans comprised approximately 87% and 91% of loans originated during the years ended December 31, 2007 and 2006, respectively. The other loans originated, in each year, were land-home loans, which represent manufactured housing loans that are additionally collateralized by real estate.

     Interest income on loans increased $17.4 million, from $69.7 million to $87.1 million, or 25.0%. This increase in interest income resulted primarily from an increase in the average outstanding balance of manufactured housing loan receivables of $226.4 million from $851.8 million to $1,078.2 million, or 26.6%. The increase in the average receivable balance was partially offset by a decrease in the average yield on the portfolio from 8.2% to 8.1%. The decrease in the yield on the portfolio was due to competitive conditions resulting in lower interest rates on new originations and a continuing positive change in the credit quality of the loan portfolio. Generally, higher credit quality loans will carry a lower interest rate.

     Interest income on other interest earning assets increased from $4.6 million to $5.0 million. The increase was primarily the result of an increase in the average balance of interest earning assets other than manufactured housing loans and investment securities from $16.6 million to $22.2 million.

     Interest expense increased $16.3 million, or 37.5%, to $59.8 million from $43.5 million. The majority of our interest expense relates to interest on our loan funding facilities. Average debt outstanding increased $228.8 million to $981.2 million compared to $752.4 million, or 30.4%. The average interest rate on total debt outstanding increased from 5.8% to 6.1%.

     The following table presents information relative to the average balances and interest rates of our interest earning assets and interest bearing liabilities for the years ended December 31 (dollars in thousands):

		2007												2006
		Average								Yield/				Average								Yield/
		Balance				Interest				Rate				Balance				Interest				Rate
Interest earning assets:
Manufactured housing loans (1)		$	1,078,174			$	87,114				8.08	%		$	851,758			$	69,702				8.18	%
Investment securities			41,228				3,804				9.23	%			41,291				3,750				9.08	%
Other interest earning assets			22,212				1,209				5.44	%			16,609				843				5.08	%
Total		$	1,141,614			$	92,127				8.07	%		$	909,658			$	74,295				8.17	%
Interest bearing liabilities:
Loan funding facilities(2)		$	955,807			$	57,899				6.06	%		$	728,331			$	42,058				5.77	%
Repurchase agreements			20,811				1,270				6.10	%			23,582				1,398				5.93	%
Other interest bearing liabilities (3)			4,562				589				12.91	%			447				42				9.40	%
Total		$	981,180			$	59,758				6.09	%		$	752,360			$	43,498				5.78	%
Net interest income and interest rate spread						$	32,369				1.98	%						$	30,797				2.39	%
Net yield on average interest earning assets (4)											2.84	%											3.39	%

     The following table sets forth the changes in the components of net interest income for the year ended December 31, 2007 compared to the year ended December 31, 2006 (in thousands). The changes in net interest income between periods have been reflected as attributable to either volume or rate changes. For the purposes of this table, changes that are not solely due to volume or rate changes are allocated to rate.

		Volume				Rate				Total
Interest earning assets:
Manufactured housing loans		$	18,528			$	(1,116	)		$	17,412
Investment securities			(6	)			60				54
Other interest earning assets			284				82				366
Total interest income		$	18,806			$	(974	)		$	17,832
Interest bearing liabilities:
Loan funding facilities		$	13,136			$	2,705			$	15,841
Repurchase agreements			(164	)			36				(128	)
Other interest bearing liabilities			387				160				547
Total interest expense		$	13,359			$	2,901			$	16,260
Increase in net interest income										$	1,572

     Monthly provisions are made to the allowance for general loan losses in order to maintain a level that is adequate to absorb inherent losses in the manufactured housing loan portfolio. The level of the allowance is based principally on the outstanding balance of the contracts held on our balance sheet, current loan delinquencies and historical trends. The provision for loan losses increased 22.5% to $8.7 million from $7.1 million. The provision for loan losses for the year ended December 31, 2006 was reduced by approximately $1.6 million as a result of a reduction in the portion of the allowance for loan losses initially established for estimated losses related to the effects of Hurricane Katrina and Hurricane Rita. No such reduction was recorded during the year ended December 31, 2007. Net charge-offs were $9.3 million, or 0.9% of the average outstanding loans receivable balance, and $8.6 million, or 1.0% of the average outstanding loans receivable balance, for the years ended December 31, 2007 and 2006, respectively.

     An impairment of $0.5 million in the carrying value of a previously purchased loan pool was recognized during

the year ended December 31, 2006, as a result of changes in projected cash flows. No such impairment was recorded during the year ended December 31, 2007.

     Non-interest income for the year ended December 31, 2007 totaled $22.0 million as compared to $17.8 million for 2006, an increase of $4.2 million, or 23.6%. The primary components of non-interest income are fees and other income from loan servicing and insurance operations. The increase in non-interest income is primarily due to the increase in the average serviced loan portfolio on which servicing fees are collected from $1.6 billion to $1.7 billion, as well as an increase of $0.6 million in third-party origination income and an increase of $0.2 million in insurance commissions.

     Total non-interest expense for the year ended December 31, 2007, including a non-cash goodwill impairment charge of $32.3 million and an investment impairment charge of $9.2 million, was $77.4 million as compared to $34.1 million for 2006. Following is a discussion of the increase of $43.3 million, or 127.0%.

     Personnel expenses increased approximately $0.6 million, or 2.5%, to $24.4 million compared to $23.8 million. The increase is primarily the result of a $0.6 million increase in salaries and bonuses.

     Loan origination and servicing expenses increased approximately $0.4 million, or 25.0%, to $2.0 million compared to $1.6 million. The increase is primarily attributable to increases in repossession expenses.

     As a result of the acquisition of Origen Financial L.L.C., our predecessor company, on October 8, 2003, which was accounted for as a purchase, we recorded the net assets acquired at fair value, which resulted in recording goodwill of $32.3 million. We performed our annual impairment test of goodwill on December 31, 2007, based on conditions as of December 31, 2007, in accordance with SFAS 142, and determined that our recorded goodwill was fully impaired. The impairment was due to current market and economic conditions which have resulted in a further and extended decline in the quoted market price of the Company’s equity securities below tangible book value. As a result, we recorded a non-cash goodwill impairment charge of $32.3 million during the year ended December 31, 2007. No impairment was recorded during the year ended December 31, 2006.

     In December 2007, we transferred an investment with a $31.8 million carrying value from investments held-to-maturity to investments available-for-sale. At the time of this transfer we recognized an other-than-temporary impairment of $9.2 million in order to record the investment at fair value upon completion of the transfer (See Note 3 — “Investments”, Note 11 — “Debt” and Note 21 — “Subsequent Events” under Item 8 — Financial Statements and Supplementary Data” for further discussion).

     As a national loan originator and servicer of manufactured housing loans, we are required to be licensed in all states in which we conduct business. Accordingly, we are subject to taxation by the states in which we conduct business. Depending on the individual state, taxes may be based on proportioned revenue, net income, capital base or asset base. During both of the years ended December 31, 2007 and 2006, we incurred state taxes of $0.3 million.

     Other operating expenses, which consist of occupancy and equipment, professional fees, travel and entertainment and miscellaneous expenses increased $0.9 million, or 10.8%, from $8.3 million to $9.2 million. Professional fees increased by $0.4 million, or 25.0% from $1.6 million to $2.0 million. Occupancy and equipment, office expense and telephone expense was $5.0 million during both 2007 and 2006. Travel and entertainment expense increased $0.5 million, or 35.7%, from $1.4 million to $1.9 million. Miscellaneous expenses were $0.3 million during both of the years ended December 31, 2007 and 2006.

     Income tax expenses for the years ended December 31, 2007 and 2006 were approximately $60,000 and $24,000, respectively.

Results of Operations for the Years Ended December 31, 2006 and December 31, 2005

     Loan originations increased $14.7 million, or 5.5% to $282.7 million from $268.0 million for the years ended December 31, 2006 and 2005, respectively. We additionally processed $49.6 million and $32.0 million in loans originated under third — party origination agreements during the years ended December 31, 2006 and 2005, respectively. Chattel loans comprised approximately 91% and 97% of loans originated during the years ended

December 31, 2006 and 2005, respectively. The other loans originated, in each year, were land-home loans, which represent manufactured housing loans that are additionally collateralized by real estate.

     Interest income on loans increased $14.5 million, from $55.2 million to $69.7 million, or 26.3%. This increase in interest income resulted primarily from an increase in the average outstanding balance of manufactured housing loan receivables of $184.7 million from $667.1 million to $851.8 million, or 27.7%. The increase in the average receivable balance was partially offset by a decrease in the average yield on the portfolio from 8.3% to 8.2%. The decrease in the yield on the portfolio was due to competitive conditions resulting in lower interest rates on new originations and a continuing positive change in the credit quality of the loan portfolio. Generally, higher credit quality loans will carry a lower interest rate.

     Interest income on other interest earning assets increased from $4.2 million to $4.6 million. The increase was primarily the result of an increase in the average yield on interest earning assets other than manufactured housing loans and investment securities from 2.9% to 5.1%.

     Interest expense increased $15.0 million, or 52.6%, to $43.5 million from $28.5 million. The majority of our interest expense relates to interest on our loan funding facilities. Average debt outstanding increased $184.9 million to $752.4 million compared to $567.5 million, or 32.6%. The average interest rate on total debt outstanding increased from 5.0% to 5.8%. The higher average interest rate for the year ended December 31, 2006 was primarily due to increases in the base LIBOR rate.

     The following table presents information relative to the average balances and interest rates of our interest earning assets and interest bearing liabilities for the years ended December 31 (dollars in thousands):

		2006												2005
		Average								Yield/				Average								Yield/
		Balance				Interest				Rate				Balance				Interest				Rate
Interest earning assets:
Manufactured housing loans (1)		$	851,758			$	69,702				8.18	%		$	667,089			$	55,164				8.27	%
Investment securities			41,291				3,750				9.08	%			40,442				3,761				9.30	%
Other interest earning assets			16,609				843				5.08	%			16,029				466				2.91	%
Total		$	909,658			$	74,295				8.17	%		$	723,560			$	59,391				8.21	%
Interest bearing liabilities (2):
Loan funding facilities		$	728,331			$	42,058				5.77	%		$	544,002			$	27,465				5.05	%
Repurchase agreements			23,582				1,398				5.93	%			22,793				950				4.17	%
Other interest bearing liabilities (4)			447				42				9.40	%			710				53				7.46	%
Total		$	752,360			$	43,498				5.78	%		$	567,505			$	28,468				5.02	%
Net interest income and interest rate spread						$	30,797				2.39	%						$	30,923				3.19	%
Net yield on average interest earning assets (4)											3.39	%											4.27	%

     The following table sets forth the changes in the components of net interest income for the year ended December 31, 2006 compared to the year ended December 31, 2005 (in thousands). The changes in net interest income between periods have been reflected as attributable to either volume or rate changes. For the purposes of this table, changes that are not solely due to volume or rate changes are allocated to rate.

		Volume				Rate				Total
Interest earning assets:
Manufactured housing loans		$	15,271			$	(733	)		$	14,538
Investment securities			79				(90	)			(11	)
Other interest earning assets			17				360				377
Total interest income		$	15,367			$	(463	)		$	14,904
Interest bearing liabilities:
Loan funding facilities		$	9,306			$	5,287			$	14,593
Repurchase agreements			33				415				448
Other interest bearing liabilities			(20	)			9				(11	)
Total interest expense		$	9,319			$	5,711			$	15,030
Decrease in net interest income										$	(126	)

     Monthly provisions are made to the allowance for general loan losses in order to maintain a level that is adequate to absorb inherent losses in the manufactured housing loan portfolio. The provision for loan losses decreased 44.1% to $7.1 million from $12.7 million. The provision for the year ended December 31, 2005 included approximately $3.5 million related to the effects of Hurricane Katrina and Hurricane Rita and approximately $0.8 million of losses related to the charge-off of loans repurchased from Vanderbilt Mortgage and Finance, Inc. (“Vanderbilt”) under a previous repurchase agreement. Net charge-offs were $8.6 million for the year ended December 31, 2006 compared to $10.0 million for the year ended December 31, 2005. As a percentage of average outstanding principal balance total net charge-offs decreased to 1.0% compared to 1.5%.

     An impairment of $0.5 million and $0.4 million in the carrying value of a previously purchased loan pool was recognized during the years ended December 31, 2006 and 2005, respectively, as a result of changes in projected cash flows.

     Non-interest income for the year ended December 31, 2006 totaled $17.8 million as compared to $14.7 million for 2005, an increase of 21.1%. The primary components of non-interest income are fees and other income from loan servicing and insurance operations. The increase in non-interest income is primarily due to the increase in the average serviced loan portfolio on which servicing fees are collected from $1,441.5 million to $1,555.0 million.

     Total non-interest expense for the year ended December 31, 2006 was $34.1 million as compared to $35.1 million for 2005. Following is a discussion of the decrease of $1.0 million, or 2.8%.

     Personnel expenses increased approximately $1.2 million, or 5.3%, to $23.8 million compared to $22.6 million. The increase is primarily the result of a $0.9 million increase in salaries and temporary office staffing expenses, a $0.9 million increase in annual performance bonuses and incentives and a $0.2 million increase in health insurance expenses, offset by a decrease of $0.8 million in share-based compensation expenses.

     Loan origination and servicing expenses amounted to approximately $1.6 million for both the year ended December 31, 2006 and 2005.

     Write-down of residual interest decreased from $0.7 million to zero. Securitized loan transactions completed during years 2002 and 2001 were structured as loan sales for accounting purposes. As a result, our predecessor companies recorded an asset representing their residual interests in the loans at the time of sale, based on the discounted values of the projected cash flows over the expected life of the loans sold. During the year ended December 31, 2005, we wrote-off our remaining $0.7 million residual interest in the 2002-A securitization as a result of the effects of Hurricane Katrina and Hurricane Rita. Since 2002, neither we nor our predecessor has structured a securitization transaction as a sale for accounting purposes, nor is it our intention to do so in the future. There were no write-downs of residual interests during the year ended December 31, 2006. As of December 31, 2006 and 2005 we had no retained interests in loan securitizations remaining on our consolidated balance sheet.

     During the year ended December 31, 2005 we incurred a loss of $0.8 million as a result of our buy-out of our recourse obligation with Vanderbilt.

     As a national loan originator and servicer of manufactured housing loans, we are required to be licensed in all states in which we conduct business. Accordingly, we are subject to taxation by the states in which we conduct business. Depending on the individual state, taxes may be based on proportioned revenue, net income, capital base or asset base. During the year ended December 31, 2006 we incurred state taxes of $0.3 million as compared to $0.4 million during the year ended December 31, 2005.

     Other operating expenses, which consist of occupancy and equipment, professional fees, travel and entertainment and miscellaneous expenses decreased $0.6 million, or 6.7%, from $8.9 million to $8.3 million. Professional fees decreased by $0.3 million, or 15.8% from $1.9 million to $1.6 million. Occupancy and equipment, office expense and telephone expense increased a total of $0.5 million, or 11.1%, from $4.5 million to $5.0 million. Travel and entertainment expense was $1.4 million during both 2006 and 2005. Miscellaneous expenses were $0.3 million and $1.1 million during the years ended December 31, 2006 and 2005, respectively.

     Income tax expenses for the year ended December 31, 2006 were approximately $24,000. There were no income tax expenses for the year ended December 31, 2005.

Liquidity and Capital Resources

     During the third and fourth quarters of 2007 the capital markets encountered unprecedented disruption as a result of difficulties in the sub-prime mortgage market. While we are not participants in that market, we nonetheless were negatively affected by the unsettled market conditions. Spreads widened across all spectrums of the asset-backed securities market and providers of warehouse lending facilities and other forms of operating capital severely tightened conditions and applied significantly more conservative market value determinations on the collateral underlying existing loan programs. The issuance of $15 million of senior secured promissory notes during the third quarter, as described more fully below and elsewhere in this Form 10-K, temporarily enhanced our liquidity position. However, as described above under “— Developments Based on Current Adverse Market Conditions,” market conditions have had a severe adverse effect on our liquidity and capital resources. Accordingly, among other actions, we have suspended originating loans for our own account until these markets recover, we sold our portfolio of unsecuritized loans at a loss and our warehouse credit facility has expired.

     We require capital to meet our existing debt obligations, and to fund our loan servicing and other operations. At December 31, 2007 we had approximately $10.8 million in available cash and cash equivalents. As a REIT, we are required to distribute at least 90% of our REIT taxable income (as defined in the Internal Revenue Code) to our stockholders on an annual basis. Therefore, as a general matter, it is unlikely we will have any substantial cash balances that could be used to meet our liquidity needs. Instead, these needs must be met from cash provided from operations and external sources of capital. Historically, we have satisfied our liquidity needs through cash generated from operations, sales of our common and preferred stock, borrowings on our credit facilities and securitizations. Given that we have ceased originating loans for our own account, our business has become less capital intensive, and we believe that cash provided from operations will be sufficient to fund our ongoing business.

     Cash provided by operating activities during the year ended December 31, 2007, totaled $23.1 million versus $16.3 million for the year ended December 31, 2006. Cash used in investing activities was $254.0 million for the year ended December 31, 2007 versus $193.3 million for the year ended December 31, 2006. Cash used to originate and purchase loans increased 27.7%, or $79.9 million, to $368.3 million for the year ended December 31, 2007 compared to $288.4 million for the year ended December 31, 2006. Principal collections on loans totaled $104.2 million for the year ended December 31, 2007 as compared to $86.6 million for the year ended December 31, 2006, an increase of $17.6 million, or 20.3%. The increase in collections is primarily related to the increase in the average outstanding loan portfolio balance, which was $1,078.2 million for the year ended December 31, 2007 compared to $851.8 million for the year ended December 31, 2006, in addition to improved credit quality and decreased delinquency as a percentage of the outstanding loan receivable balances.

     The primary sources of cash during the year ended December 31, 2007 were our 2007-A and 2007-B securitized financing transactions completed in May 2007 and October 2007, respectively. In our 2007-A securitization we

securitized approximately $200.4 million in principal balance of manufactured housing loans, which was funded by issuing bonds of approximately $184.4 million. Approximately $182.4 million of proceeds was used to reduce the aggregate balance of notes outstanding under our Citigroup warehouse financing facility. In our 2007-B securitization we securitized approximately $140.0 million in principal balance of manufactured housing loans, which was funded by issuing bonds of approximately $126.7 million. Approximately $122.4 million of proceeds was used to reduce the aggregate balance of notes outstanding under our Citigroup warehouse financing facility.

     Access to the securitization market has historically been important to our business. We used the proceeds from successful securitization transactions to pay down our other short-term credit facilities giving us renewed borrowing capacity to fund new loan originations. Despite the fact that securities issued by us since 2002 have continued to perform well, due to current market conditions, we have not utilized the securitization market since October 2007. In addition, our credit facility used to originate loans for our own account expired and was not renewed by our lender, we were unable to secure replacement financing on acceptable terms, and so we have ceased originating loans for our own account. As we do not currently intend to originate new loans for our own account, we do not anticipate additional securitization transactions. During March 2008, due to our inability to access the securitization market on favorable terms, we sold our unsecuritized whole loan portfolio, for an amount below par value, in order to meet our obligations to Citigroup under our warehouse financing which had matured.

     Our short-term securitization facility used for warehouse financing with Citigroup matured in March 2008. Under the terms of the agreement, originally entered into in March 2003 and amended periodically, most recently in August 2007, we pledged loans as collateral and in turn were advanced funds. The facility had a maximum advance amount of $200 million at an annual interest rate equal to LIBOR plus a spread. The outstanding balance on the facility was approximately $173.1 million and $131.5 million at December 31, 2007 and 2006, respectively. Additionally, the facility includes a $55 million supplemental advance amount collateralized by our residual interests in our 2004-A, 2004-B, 2005-A, 2005-B, 2006-A, 2007-A and 2007-B securitizations. The supplemental advance facility expired in March 2008 and has been extended until June 13, 2008. As of March 14, 2008, we had $46 million outstanding under our supplemental advance facility. We are seeking alternative means to satisfy our obligations under this facility, which may include cash from operations, asset sales, re-financing arrangements, and issuances of convertible debt or equity.

     On September 11, 2007, we, through our primary operating subsidiary, Origen Financial L.L.C., entered into the Bridge Financing (see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview”). The Bridge Financing had an aggregate outstanding balance of $14.6 million at December 31, 2007. Proceeds from the Bridge Financing were used for general corporate purposes and to provide working capital. The Bridge Financing is due on September 11, 2008. We are seeking alternative means to satisfy our obligations under the Bridge Financing, which may include cash from operations, asset sales, re-financing arrangements, and issuances of convertible debt or equity.

     Our audited financial statements for the fiscal year ended December 31, 2007, were prepared under the assumption that we will continue our operations as a going concern. Our registered independent accountants in their audit report have expressed substantial doubt about our ability to continue as a going concern. Continued operations are dependent on our ability to meet our existing debt obligations and the financing or other capital required to do so may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we cannot continue as a viable entity, our stockholders may lose some or all of their investment in the company.

     In September 2005, the Securities and Exchange Commission declared effective our shelf registration statement on Form S-3 for the proposed offering, from time to time, of up to $200 million of our common stock, preferred stock and debt securities. In addition to such debt securities, preferred stock and other common stock we may sell under the registration statement from time to time, we have registered for sale 1,540,000 shares of our common stock pursuant to a sales agreement that we have entered into with Brinson Patrick Securities Corporation. Sales under the agreement commenced on June 5, 2007. We sold 50,063 shares of common stock under the sales agreement with Brinson Patrick Securities Corporation during the year ended December 31, 2007, at the price of our common stock prevailing at the time of each sale. We received proceeds, net of commissions, of $296,000 during the year ended December 31, 2007, as a result of these sales.

     In addition to borrowings under our credit facilities and issuances of securitized notes, we have fixed contractual obligations under various lease agreements. Our contractual obligations were comprised of the following as of December 31, 2007 (in thousands):

						Less than				1 - 3				4 - 5
		Total				1 year				years				years				Thereafter
Notes payable — Citigroup (1)		$	173,072			$	129,804			$	43,268			$	—			$	—
Notes payable — 2004-A securitization (2)			95,753				13,737				21,953				16,671				43,392
Notes payable — 2004-B securitization (3)			96,290				16,434				23,345				16,716				39,795
Notes payable — 2005-A securitization (4)			108,318				21,382				24,847				17,962				44,127
Notes payable — 2005-B securitization (5)			118,464				19,719				29,429				19,772				49,544
Notes payable — 2006-A securitization (6)			169,398				26,536				43,580				27,785				71,497
Notes payable — 2007-A securitization (7)			171,588				21,118				40,451				32,972				77,047
Notes payable — 2007-B securitization (8)			124,839				13,794				29,022				22,378				59,645
Repurchase agreement (9)			17,653				17,653				—				—				—
Notes payable — related party (10)			14,593				14,593				—				—				—
Operating leases			4,270				1,126				2,151				993				—
Total contractual obligations		$	1,094,238			$	295,896			$	258,046			$	155,249			$	385,047

     We need cash to pay interest expense on our securitized bonds and credit facilities. We expect the total interest expense to be in excess of $47.6 million during the twelve months ending December 31, 2008.

     Our long-term liquidity and capital requirements consist primarily of funds necessary to continue our loan servicing and other operations. We expect to meet our long-term liquidity requirements through cash generated from operations, but we may require external sources of capital, which may include sales of assets, sales of shares of our common stock, preferred stock, debt securities, convertible debt securities (either pursuant to our shelf registration statement on Form S-3 or otherwise) or third-party borrowings. Our ability to meet our long-term liquidity needs depends on numerous factors, many of which are outside of our control. These factors include general capital market and economic conditions, general market interest rate levels, the shape of the yield curve and spreads between rates on U.S. Treasury obligations and securitized bonds, the access to reliable sources of credit enhancement, such as financial guarantees, all of which affect investors’ demand for equity and debt securities, including securitized debt securities. As has recently been demonstrated, general market conditions can change rapidly, and accordingly the level of access to liquidity and the cost of such liquidity can be negatively impacted in ways disproportionate to the credit performance of an entity’s underlying asset portfolio or the quality of its operations.

     The risks associated with the manufactured housing business become more acute in any economic slowdown or recession. Periods of economic slowdown or recession may be accompanied by decreased demand for consumer credit and declining asset values. In the manufactured housing business, any material decline in collateral values increases the loan-to-value ratios of loans previously made, thereby weakening collateral coverage and increasing the size of losses in the event of default. Delinquencies, repossessions, foreclosures and losses generally increase during economic slowdowns or recessions. For our finance customers, loss of employment, increases in cost-of-

living or other adverse economic conditions would impair their ability to meet their payment obligations. Higher industry inventory levels of repossessed manufactured houses may affect recovery rates and result in future impairment charges and provision for losses. In addition, in an economic slowdown or recession, servicing and litigation costs generally increase. Any sustained period of increased delinquencies, repossessions, foreclosures, losses or increased costs would adversely affect our financial condition, results of operations and liquidity. We bear the risk of delinquency and default on securitized loans in which we have a residual or retained ownership interest. We also reacquire the risks of delinquency and default for loans that we are obligated to repurchase. Repurchase obligations are typically triggered in sales or securitizations if the loan materially violates our representations or warranties. If we experience higher-than-expected levels of delinquency or default in pools of loans that we service, resulting in higher-than-anticipated losses, our servicing rights may be terminated, which would result in a loss of future servicing income.

Forward-Looking Statements

     This Annual Report on Form 10-K contains various “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and we intend that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this Form 10-K that relate to prospective events or developments are deemed to be forward-looking statements. Words such as “believes,” “forecasts,” “anticipates,” “intends,” “plans,” “expects,” “will” and similar expressions are intended to identify forward-looking statements. These forward-looking statements reflect our current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this Form 10-K. These risks and uncertainties may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include:

	•		the risk that the inability to raise additional capital to meet our existing debt obligations could threaten our ability to continue as a going concern;
	•		the performance of our manufactured housing loans;
	•		our ability to borrow at favorable rates and terms;
	•		conditions in the asset-backed securities market generally and the manufactured housing asset-backed securities market specifically, including rating agencies’ views on the manufactured housing industry;
	•		the supply of manufactured housing loans;
	•		interest rate levels and changes in the yield curve (which is the curve formed by the differing Treasury rates paid on one, two, three, five, ten and thirty-year term debt);
	•		our ability to use hedging strategies to insulate our exposure to changing interest rates;
	•		changes in, and the costs associated with complying with, federal, state and local regulations, including consumer finance and housing regulations;
	•		applicable laws, including federal income tax laws;
	•		general economic conditions in the markets in which we operate;

and those referenced in Item 1A, under the headings entitled “Risk Factors” contained in this Form 10-K and our other filings with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available to us on the date of this Form 10-K. We do not intend to update or revise any forward-looking statements that we make in this document or other documents, reports, filings or press releases, whether as a result of new information, future events or otherwise.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     Market risk is the risk of loss arising from adverse changes in market prices and interest rates. Our market risk arises from interest rate risk inherent in our financial instruments. We are not currently subject to foreign currency exchange rate risk or commodity price risk.

     The outstanding balance of our variable rate debt, under which we paid interest at various LIBOR rates plus a spread, totaled $656.5 million and $348.3 million at December 31, 2007 and 2006, respectively. If LIBOR increased or decreased by 1.0% during the years ended December 31, 2007 and 2006, we believe our interest expense would have increased or decreased by approximately $5.2 million and $2.1 million, respectively, based on the $518.0 million and $213.8 million average balance outstanding under our variable rate debt facilities for the years ended December 31, 2007 and 2006, respectively. As a result of our hedging activity, the increase or decrease in interest expense would have been offset by $3.3 million and $0.7 million during the years ended December 31, 2007 and 2006, respectively. We had no variable rate interest earning assets outstanding during the years ended December 31, 2007 or 2006.

     The following table shows the contractual maturity dates of our assets and liabilities at December 31, 2007. For each maturity category in the table the difference between interest-earning assets and interest-bearing liabilities reflects an imbalance between re-pricing opportunities for the two sides of the balance sheet. The consequences of a negative cumulative gap at the end of one year suggests that, if interest rates were to rise, liability costs would increase more quickly than asset yields, placing negative pressure on earnings (dollars in thousands).

		Expected Maturity
		0 to 3				4 to 12				1 to 5				Over 5
		months				months				years				years				Total
Assets
Cash and equivalents		$	10,791			$	—			$	—			$	—			$	10,791
Restricted cash			16,290				—				—				—				16,290
Investments			22,603				—				—				9,790				32,393
Loans receivable, net			25,032				111,995				485,678				571,211				1,193,916
Servicing advances			3,420				2,878				—				—				6,298
Servicing rights			81				242				916				907				2,146
Furniture, fixtures and equipment, net			238				744				1,992				—				2,974
Repossessed houses			2,491				2,490				—				—				4,981
Other assets			3,875				1,505				2,959				6,073				14,412
Total assets		$	84,821			$	119,854			$	491,545			$	587,981			$	1,284,201
Liabilities and Stockholders’ Equity
Warehouse financing		$	32,451			$	97,353			$	43,268			$	—			$	173,072
Securitization financing			34,899				97,820				366,883				385,048				884,650
Repurchase agreements			17,653				—				—				—				17,653
Notes payable — related party			—				14,593				—				—				14,593
Other liabilities			22,543				2,360				1,557				19,388				45,848
Total liabilities			107,546				212,126				411,708				404,436				1,135,816
Preferred stock			—				—				—				125				125
Common stock			—				—				—				260				260
Additional paid-in-capital			—				—				—				221,842				221,842
Accumulated other comprehensive loss			—				37				130				(20,179	)			(20,012	)
Distributions in excess of earnings			—				—				—				(53,830	)			(53,830	)
Total stockholders’ equity			—				37				130				148,218				148,385
Total liabilities and stockholders’ equity		$	107,546			$	212,163			$	411,838			$	552,654			$	1,284,201
Interest sensitivity gap		$	(22,725	)		$	(92,309	)		$	79,707			$	35,327
Cumulative interest sensitivity gap		$	(22,725	)		$	(115,034	)		$	(35,327	)			—
Cumulative interest sensitivity gap to total assets			(1.77	)%			(8.96	)%			(2.75	)%			—

     We believe the negative effect of a rise in interest rates is reduced by the anticipated securitization of our loans receivable, which in conjunction with our hedging strategies, fixes our cost of funds associated with the loans over the lives of such loans.

     Our hedging strategies use derivative financial instruments, such as interest rate swap contracts, to mitigate interest rate risk and variability in cash flows on our securitizations and anticipated securitizations. It is not our policy to use derivatives to speculate on interest rates. These derivative instruments are intended to provide income

and cash flow to offset potential increased interest expense and potential variability in cash flows under certain interest rate environments.

     We held eight separate open derivative positions at December 31, 2007. All eight of these positions were interest rate swaps.

     Three of the positions are interest rate swaps related to our 2006-A, 2007-A and 2007-B securitizations. These interest rate swaps lock in the base LIBOR interest rate on the outstanding balances of the 2006-A, 2007-A and 2007-B variable rate notes at 5.48%, 5.12% and 5.23%, respectively, for the life of the notes. At December 31, 2007, the outstanding notional balances on these interest rate swaps was $171.3 million, $172.6 million and $125.3 million on the 2006-A, 2007-A and 2007-B interest rate swaps, respectively.

     We held two interest rate swaps for the purpose of locking in the base LIBOR interest rate on a portion of our anticipated 2008-A securitization transaction. The agreements fix the interest rate on notional amounts of $35 million and $15 million at 5.07% and 4.77%, respectively. (See Note 21, “Subsequent Events,” under Item 8, Financial Statements and Supplementary Data, for further discussion) .

     At December 31, 2007 we held three interest rate swaps which were not accounted for as hedges. Under the agreements, at December 31, 2007, we paid one month LIBOR and received fixed rates of 5.48%, 5.12% and 5.23% on outstanding notional balances of $1.1 million, $0.3 million and $0.6 million, respectively.

     The following table shows our financial instruments that are sensitive to changes in interest rates and are categorized by contractual maturity at December 31, 2007 (dollars in thousands):

		Interest Rate Sensitivity
																						There-
		2008				2009				2010				2011				2012				after				Total
Interest sensitive assets
Interest bearing deposits		$	24,400			$	—			$	—			$	—			$	—			$	—			$	24,400
Average interest rate			5.44	%			—				—				—				—				—				5.44	%
Investments			22,603				—				—				—				—				9,790				32,393
Average interest rate			9.23	%			—				—				—				—				9.23	%			9.23	%
Loans receivable, net			137,027				142,902				128,840				113,782				100,154				571,211				1,193,916
Average interest rate			9.45	%			9.45	%			9.45	%			9.45	%			9.45	%			9.45	%			9.45	%
Derivative asset			—				—				—				—				—				89				89
Average interest rate			—				—				—				—				—				5.03	%			5.03	%
Total interest sensitive assets		$	184,030			$	142,902			$	128,840			$	113,782			$	100,154			$	581,089			$	1,250,798
Interest sensitive liabilities
Warehouse financing		$	129,804			$	43,268			$	—			$	—			$	—			$	—			$	173,072
Average interest rate			7.19	%			7.19	%			—				—				—				—				7.19	%
Securitization financing			132,720				115,332				97,294				83,223				71,034				385,047				884,650
Average interest rate			5.81	%			5.81	%			5.81	%			5.81	%			5.81	%			5.81	%			5.81	%
Repurchase agreements			17,653				—				—				—				—				—				17,653
Average interest rate			6.10	%			—				—				—				—				—				6.10	%
Notes payable — related party			14,593				—				—				—				—				—				14,593
Average interest rate			12.88	%			—				—				—				—				—				12.88	%
Derivative liability			1,842				—				—				—				—				18,601				20,443
Average interest rate			4.98	%			—				—				—				—				5.28	%			5.25	%
Total interest sensitive liabilities		$	296,612			$	158,600			$	97,294			$	83,223			$	71,034			$	403,648			$	1,110,411