ECC CAPITAL CORPORATION 
By
This distribution and the prior distribution on
-- ECC Capital continues to experience higher levels of delinquency and
losses on its mortgage loans held for investment in its securitization
trusts. Therefore, ECC Capital estimates that the probability and
amount of future cash from over-collateralization has been
significantly reduced. Consequently, ECC Capital has significantly
reduced the estimate of cash expenditure and investment directed toward
maximizing future over-collateralization releases.
-- ECC Capital has changed its perspective and reduced the amount of
capital that should be retained to invest in its existing and new
business opportunities. Management has not found any significant
investment opportunities that provide returns that are commensurate
with related risk. Therefore, a significant portion of ECC Capital's
allocated investment capital will be returned to the shareholders.
-- ECC Capital has settled certain liabilities, claims, contractual
obligations and restrictions. In addition, ECC Capital sold certain
real estate owned properties and collected on certain loans.
Collectively, these events provided for a reduction in required cash
reserves and an increase in cash.
-- ECC Capital has benefited from reduced operating costs.
ECC Capital has evaluated and will continue evaluating several alternatives to facilitate the realization of any remaining shareholder value, which include, but are not limited to:
-- A sale of some or all of its assets.
-- A sale of the company.
-- Investment in business opportunities that may defray the cost of its
remaining operations.
-- Use of technology to oversee and maximize the value of its remaining
mortgage portfolio or produce revenue from third parties.
-- Outsourcing of various functions.
-- Partnering and/or joint venturing to reduce cost or increase revenue.
ECC Capital has retained Milestone Advisors as its banker and advisor to assist in this process. There are no assurances that these efforts will result in additional distributions. In the absence of a transaction that allows otherwise, ECC Capital plans to retain the necessary capital to maintain its reduced ongoing operations in addition to meeting the obligations of creditors. Further, since ECC Capital must retain enough cash to operate and to meet creditor obligations it will continue to look for investments or pursue opportunities that it believes may grow shareholder value. Any remaining shareholder value may be impacted by potential losses on investments, expenses associated with ongoing operations, its existing liabilities, the adverse changing and unpredictable environment in which it operates. Therefore, ECC Capital cautions that there may be no further distributions.
ECC Capital has previously issued press releases in the past to update shareholders. Going forward, in an effort to reduce costs and because of reduced staff and limited operations, ECC Capital will limit its use of press releases. Please periodically check ECC Capital's website for information. You may also contact ECC Capital using the toll free number of 866-338-8749 or via email at investorrelations@ecccapital.com.
Safe Harbor Regarding Forward-Looking Statements
Certain statements contained in this press release, including those
regarding future distributions to shareholders and the release of proceeds
related to over-collateralization may be deemed forward-looking statements
under federal securities laws and ECC Capital intends that those
forward-looking statements be subject to the safe-harbor created thereby.
These forward-looking statements are based on current expectations and
assumptions and are subject to risks and uncertainties, which could affect ECC
Capital's future plans. ECC Capital cautions that these statements are
qualified by important factors that could cause actual results to differ
materially from those reflected by the forward-looking statements. These
factors include, but are not limited to: (1) the impact of losses and
delinquencies from ECC Capital's residual interests in securitizations (2) the
tightening of credit standards, (3) the condition of the U.S. economy and
financial system, (4) interest rates and the subsequent effect on the
business, (5) ECC Capital's ability to obtain quality loan servicing and
default management services, (6) the stability of residential property values,
(7) the potential effect of new state or federal laws or regulations, (8) ECC
Capital's ability to implement successfully its business plan, (9) continued
availability of credit facilities and access to the securitization and capital
markets or other sources of capital, (10) ECC Capital's ability and the
ability of its subsidiaries to operate effectively within the limitations
imposed on REITs by federal tax rules, (11) ECC Capital's ability to qualify
for exemptions under any SEC registration requirements; (12) ECC Capital's
ability to retain qualified personnel, (13) the outcome of various pending
litigation, and (14) other factors and risks discussed in ECC Capital's
financial report for the year ended
For Further Information:
AT THE COMPANY:
Roque A. Santi
President and Chief Financial Officer
(949) 955-8730
rsanti@ecccapital.com
SOURCE ECC Capital Corporation
