by Calculated Risk on 2/20/2007 05:22:00 PM

From MarketWatch:

NovaStar mulls change to REIT status NovaStar Financial said late Tuesday that it's considering whether to change its Real Estate Investment Trust status after the subprime mortgage lender reported a fourth-quarter net loss.
...
Problems with mortgages originated in 2006 knocked $17.4 million, or 47 cents a share, off fourth-quarter earnings. Provisions for losses on loans NovaStar has been forced to repurchase cut $13.4 million, or 36 cents a share, off results. More provisions for losses on a package of early 2006 mortgages the company securitized cost it another $10.3 million, or 28 cents a share, NovaStar said.
...
REITs have to distribute at least 90% of their taxable income as dividends. NovaStar Chief Financial Officer Greg Metz said the company expects to recognize little, if any, taxable income in 2007 through 2011, so "management is currently evaluating whether it is in shareholders' best interest to retain the company's REIT status beyond 2007 given the asset, income and other REIT-related restrictions the company must operate within."
emphasis added

NovaStar conference call (hat tip max):