Doral Financial Corp. - Mortgage Lender

Update - 2008-03-19: In an article yesterday, 2008-03-18, CNBC reported that Doral Financial is one of the firms implicated in the FBI's probe of 17 mortgage companies. It notes that "A former Doral treasurer was indicted for investment fraud earlier this month. He denied the allegations and the company declined to comment."

According to a 2008-03-06 article, former treasurer and senior executive vice president Mario Levis' misrepresentation of Doral's financial condition and performance resulted in a loss of $4 billion.

Original Listing - 2008-03-19: The company swung to a net loss of $117 million in 2006, from a gain of $13.2 million in 2005. It needs to refinance $625 million by July or it faces a terminal cash crunch.

More on recent scandal and errors from the article above:

"Last year, Doral agreed to pay a $25 million penalty to settle fraud charges with the U.S. Securities and Exchange Commission. Doral did not admit or deny the allegations.

The SEC said Doral overstated profit by about $921 million over several years. The mortgage company's former senior management is accused of manipulating the underlying assumptions for mortgage-sale related gains that helped the company generate 28 straight quarters of record profit."

Doral's lending unit is actually "Doral Mortgage." We'll put up information on the relative size of that unit as it becomes available. However it seems a foregone conclusion that the influence of Doral Mortgage is enough to potentially crater the entire company.