SOURCE: Kore Holdings Inc.

April 13, 2007 07:33 ET

Kore Above Subprime

SILVER SPRING, MD -- (MARKET WIRE) -- April 13, 2007 -- Kore Holdings Inc. (PINKSHEETS: KORH) Robert F. Rood, CFO, CEO and President of KORE Holdings, stated, "We rose above the subprime debacle and are in the right products for the new market.

"Twelve months ago, we explored and changed our future in the Subprime and Mortgage markets, as we constantly do, and we chose to pursue markets a little less traveled with steady margins. We elected to adopt a business plan focused on commercial and niche/situational lending driven by the 'quick cash value' of properties at loan-to-value levels that would sustain a downturn in the mortgage market."

We returned to products like FHA that had yielded great returns to us in the late 1990s until 2002. This government insured mortgage product that embraces common sense allowed us to deliver the loan products our clients desired, while completely removing our downside risk for a net cost to our per loan bottom line of an estimated 25 basis points. Due to the growing aggressive nature of subprime/Alt-A products over the past five years, FHA was all but eliminated from the lending world. However, it remained a product at First Washington. "In our opinion it is the sole government sponsored option that exists today to refinance so many of the adjustable subprime mortgages that are the basis for the overwhelming amount of foreclosures reported month after month."

We have been a nationwide lender for over ten years and started in the "subprime mortgage world." Margins were great and the risk was understood and acceptable. As the entire housing industry exploded, subprime exploded right along with it, attracting a herd of Wall Street firms and well-known banks. We ask, "Does this loan make sense?"

Twelve months ago our residential lending arms, Mortgage America Bankers, LLC and Level One Capital Partners, LLC eliminated all subprime lending and reverted brokering of such loans directly to those mega-subprime lenders.

Mega-subprime/Alt-A lenders replaced what was a niche industry, full of small-to-medium sized players with common sense underwriting and fair margins for elevated risk. They bought all the mortgages First Washington and those like us could produce, but continuously tried to "one up" each other with product flexibility.

This created recklessly adjusting product guidelines, and reducing margins to grab a larger share of the market. These expanded guidelines create elevated risk for a continuing shrinking margin, thus eliminating the very justification for the risk in the first place.

So as Mortgage Lenders and Brokers alike fall victim to the current market conditions and the long-term exposure they created for themselves some time ago catches up with them today, we are in good standing as to both Risk and our volume of Mortgage Applications. We've been able to begin to consolidate the "Best in Bread" employees of some of those now failing companies to help us drive more business in the door and service those clients in a manner that is of course profitable, but also extremely satisfying, which means more referrals.

FORWARD-LOOKING STATEMENTS IN THIS PRESS RELEASE REGARDING KORE HOLDINGS INC. ARE MADE PURSUANT TO THE SAFE HARBOR' PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. INVESTORS ARE CAUTIONED THAT SUCH FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES AS FURTHER DISCLOSED IN THE COMPANY'S PERIODIC REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. AS A RESULT THERE CAN BE NO ASSURANCE THE COMPANY'S FUTURE RESULTS WILL NOT BE MATERIALLY DIFFERENT FROM THOSE PROJECTIONS. THE COMPANY HEREBY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO RELEASE PUBLICLY ANY UPDATED REVISIONS TO ANY SUCH STATEMENTS TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS OR ANY CHANGE IN EVENTS CONDITIONS OR CIRCUMSTANCES ON WHICH THIS STATEMENT IS BASED.

Contact Information

  • Contact:

    NIMBUS Development
    631-828-2525
    (Investor Relations)

    Rob Rood
    Kore Holdings Inc.
    301-565-9050