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SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C.
 FORM 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
 FOR THE QUARTERLY PERIOD ENDED June 30, 2005.
 OR
 o
    
    Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
 For the Transition Period From ___to ___
 COMMISSION
FILE NUMBER 000-50721
 Origen Financial, Inc.
  Delaware
(State of Incorporation)
    
    20-0145649
(I.R.S. Employer Identification No.)27777 Franklin Rd.
Suite 1700
Southfield, MI
(Address of Principal Executive Offices)
    
    48034
(Zip Code)
  þ o
 o þ




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Origen Financial, Inc.
 Index
 PagePart I Financial InformationItem 1. Financial Statements (Unaudited)Consolidated Balance Sheets  as of June 30, 2005 and December 31, 2004
    
    
    3Consolidated Statements of Earnings for the periods ended June 30, 2005 and 2004
    
    
    4Consolidated Statements of Comprehensive Income for the periods ended June 30, 2005 and 2004
    
    
    5Consolidated Statements of Cash Flows for the six months ended June 30, 2005 and 2004
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    35Item 4. Controls and Procedures
    
    
    39Part II Other InformationItem 4. Submission of Matters to a Vote of Security Holders
    
    
    40Item 6. Exhibits and Reports on Form 8-K
    
    
    40Signatures
    
    
    42First Amendment to Origin Financial, Inc. 2003 Equity Incentive PlanCertification of Chief Executive Officer Required by Rule 13a-14(a)Certification of Chief Financial Officer Required by Rule 13a-14(a)Certification of Chief Executive Officer and Chief Financial Officer Required by Rule 13a-14(b)




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Part I. Financial Information
 
 Item 1. Financial Statements
 Origen Financial, Inc.
 
 Consolidated Balance Sheet
(In thousands, except share data)
 June 30, 2005 and December 31, 2004
 June 30,
    
    December 31,2005
    
    2004(Unaudited)ASSETSAssetsCash and cash equivalents
    
    $
    3,428
    
    
    $
    9,293Restricted cash
    
    
    10,898
    
    
    
    9,222Loans receivable, net of allowance for losses of
$5,729 and $5,315, respectively
    
    
    678,197
    
    
    
    563,268Investments
    
    
    41,863
    
    
    
    37,622Furniture, fixtures and equipment, net
    
    
    3,230
    
    
    
    2,336Goodwill
    
    
    32,277
    
    
    
    32,277Other assets
    
    
    27,998
    
    
    
    28,529Total assets
    
    $
    797,891
    
    
    $
    682,547LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesWarehouse financing
    
    $
    82,128
    
    
    $
    107,373Securitization financing
    
    
    463,292
    
    
    
    328,388Repurchase agreements
    
    
    22,073
    
    
    
    20,153Notes payable  servicing advances
    
    
    1,774
    
    
    
    Recourse liability
    
    
    4,908
    
    
    
    6,603Other liabilities
    
    
    20,370
    
    
    
    16,564Total liabilities
    
    
    594,545
    
    
    
    479,081Stockholders EquityPreferred stock, $.01 par value, 10,000,000 shares
authorized; 125 shares issued and outstanding
at June 30, 2005 and December 31, 2004, respectively
    
    
    125
    
    
    
    125Common stock, $.01 stated value, 125,000,000 shares
authorized; 25,454,060 and 25,215,400 shares issued and
outstanding at June 30, 2005 and December 31, 2004,
respectively
    
    
    254
    
    
    
    252Additional paid-in-capital
    
    
    220,534
    
    
    
    219,121Accumulated other comprehensive loss
    
    
    (2,746
    )
    
    
    (1,807
    )Unearned stock compensation
    
    
    (3,362
    )
    
    
    (2,790
    )Distributions in excess of earnings
    
    
    (11,459
    )
    
    
    (11,435
    )Total stockholders equity
    
    
    203,346
    
    
    
    203,466Total liabilities and stockholders equity
    
    $
    797,891
    
    
    $
    682,547
 The accompanying notes are an integral part of these financial statements.
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Origen Financial, Inc.
 
 Consolidated Statement of Earnings (Unaudited)
(In thousands, except share data)
 For the periods ended June 30, 2005 and 2004
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Interest IncomeTotal interest income
    
    $
    14,622
    
    
    $
    10,034
    
    
    $
    27,788
    
    
    $
    18,804Total interest expense
    
    
    6,681
    
    
    
    3,296
    
    
    
    12,091
    
    
    
    6,315Net interest income before loan losses
    
    
    7,941
    
    
    
    6,738
    
    
    
    15,697
    
    
    
    12,489Provision for credit losses
    
    
    1,645
    
    
    
    1,531
    
    
    
    3,675
    
    
    
    3,422Net interest income after loan losses
    
    
    6,296
    
    
    
    5,207
    
    
    
    12,022
    
    
    
    9,067Non-Interest Income
    
    
    3,396
    
    
    
    3,014
    
    
    
    6,676
    
    
    
    5,895Non-Interest ExpensesPersonnel
    
    
    5,697
    
    
    
    4,915
    
    
    
    11,178
    
    
    
    9,317Loan origination and servicing
    
    
    380
    
    
    
    263
    
    
    
    794
    
    
    
    653Provision for recourse liability
    
    
    168
    
    
    
    
    
    
    
    218
    
    
    
    State business taxes
    
    
    77
    
    
    
    73
    
    
    
    190
    
    
    
    163Other operating
    
    
    1,857
    
    
    
    1,578
    
    
    
    3,798
    
    
    
    3,174Total non-interest expense
    
    
    8,179
    
    
    
    6,829
    
    
    
    16,178
    
    
    
    13,307NET INCOME
    
    $
    1,513
    
    
    $
    1,392
    
    
    $
    2,520
    
    
    $
    1,655Weighted average common
shares outstanding, basic
    
    
    24,818,544
    
    
    
    20,580,155
    
    
    
    24,776,139
    
    
    
    18,133,264Weighted average common
shares outstanding, diluted
    
    
    25,325,006
    
    
    
    20,891,669
    
    
    
    25,174,132
    
    
    
    18,393,586Earnings per common share:Basic
    
    $
    0.06
    
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.09Diluted
    
    $
    0.06
    
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.09
 The accompanying notes are an integral part of these financial statements.
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Origen Financial, Inc.
 
 Consolidated Statement of Other Comprehensive Income (Loss) (Unaudited)
(In thousands, except share data)
 For the periods ended June 30, 2005 and 2004
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net income
    
    $
    1,513
    
    
    $
    1,392
    
    
    $
    2,520
    
    
    $
    1,655Other comprehensive income:Net unrealized (loss) gain on
interest rate swaps
    
    
    (2,467
    )
    
    
    5
    
    
    
    (1,098
    )
    
    
    20Less reclassification of adjustment
for net realized losses included
in net income
    
    
    91
    
    
    
    
    
    
    
    159
    
    
    
    Comprehensive (loss) income
    
    $
    (863
    )
    
    $
    1,397
    
    
    $
    1,581
    
    
    $
    1,675
 The accompanying notes are an integral part of these financial statements.
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Origen Financial, Inc.
 
 Consolidated Statement of Cash Flows (Unaudited)
(In thousands, except share data)
 For the six months ended June 30
 2005
    
    2004Cash Flows From Operating ActivitiesNet income
    
    $
    2,520
    
    
    $
    1,655Adjustments to reconcile net income to
cash used in operating activities:Provision for credit losses and recourse liability
    
    
    3,893
    
    
    
    3,422Depreciation and amortization
    
    
    3,932
    
    
    
    1,881Increase in other assets
    
    
    (1,081
    )
    
    
    (4,508
    )Increase (decrease) in accounts payable and other liabilities
    
    
    159
    
    
    
    (4,529
    )Net cash provided by (used in) operating activities
    
    
    9,423
    
    
    
    (2,079
    )Cash Flows From Investing ActivitiesIncrease in restricted cash
    
    
    (1,676
    )
    
    
    (514
    )Purchase of investment securities
    
    
    (4,240
    )
    
    
    (34,270
    )Originations and purchases of loans
    
    
    (158,989
    )
    
    
    (121,374
    )Principal
collections on loans
    
    
    35,109
    
    
    
    30,696Proceeds from sale of repossessed homes
    
    
    5,638
    
    
    
    4,304Capital expenditures
    
    
    (1,301
    )
    
    
    (186
    )Net cash used in investing activities
    
    
    (125,459
    )
    
    
    (121,344
    )Cash Flows From Financing ActivitiesNet proceeds from issuance of preferred stock
    
    
    
    
    
    
    95Net proceeds from issuance of common stock
    
    
    
    
    
    
    73,107Dividends paid
    
    
    (2,545
    )
    
    
    (663
    )Proceeds from warehouse and securitization financing
    
    
    304,274
    
    
    
    425,388Repayment of warehouse and securitization financing
    
    
    (193,332
    )
    
    
    (362,853
    )Net change in notes payable  servicing advances
    
    
    1,774
    
    
    
    (4,037
    )Net cash provided by financing activities
    
    
    110,171
    
    
    
    131,037NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
    
    
    (5,865
    )
    
    
    7,614Cash and cash equivalents, beginning of period
    
    
    9,293
    
    
    
    6,926Cash and cash equivalents, end of period
    
    $
    3,428
    
    
    $
    14,540Supplemental disclosures of cash flow information:Interest paid
    
    $
    11,206
    
    
    $
    6,315Non cash financing activities:Restricted common stock issued as unearned compensation
    
    $
    2,156
    
    
    $
    3,200
 The accompanying notes are an integral part of these financial statements.
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Origen Financial, Inc.





Notes to Consolidated Financial Statements (Unaudited)


Note 1  Basis of Presentation




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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 2  Recent Accounting Pronouncements
  
   8




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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 2  Recent Accounting Pronouncements (Continued)
   9




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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 3  Per Share Data
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Numerator:Net income
    
    $
    1,513
    
    
    $
    1,392
    
    
    $
    2,520
    
    
    $
    1,655Preferred stock dividends
    
    
    (4
    )
    
    
    (4
    )
    
    
    (8
    )
    
    
    (8
    )Net income available to
common shareholders
    
    $
    1,509
    
    
    $
    1,388
    
    
    $
    2,512
    
    
    $
    1,647Denominator:Weighted average common shares
for basic EPS
    
    
    24,818
    
    
    
    20,580
    
    
    
    24,776
    
    
    
    18,133Effect of dilutive securities:Restricted stock awards
    
    
    507
    
    
    
    312
    
    
    
    398
    
    
    
    261Weighted average common shares
for diluted EPS
    
    
    25,325
    
    
    
    20,892
    
    
    
    25,174
    
    
    
    18,394Basic EPS
    
    $
    0.06
    
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.09Diluted EPS
    
    $
    0.06
    
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.09
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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 4 Stock Options
   Three Months
    
    Six MonthsEnded
    
    EndedJune 30, 2005Net income available to common shareholders
    
    $
    1,509
    
    
    $
    2,512Stock option compensation cost
    
    
    (3
    )
    
    
    (6
    )Pro forma net income available to
common shareholders
    
    $
    1,506
    
    
    $
    2,506Basic income per share as reported
    
    $
    0.06
    
    
    $
    0.10Stock option compensation cost
    
    
    
    
    
    
    Pro forma basic income per share
    
    $
    0.06
    
    
    $
    0.10Diluted income per share as reported
    
    $
    0.06
    
    
    $
    0.10Stock option compensation cost
    
    
    
    
    
    
    Pro forma diluted income per share
    
    $
    0.06
    
    
    $
    0.10
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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 5 Investments
  Note 6  Allowance for Credit Losses and Recourse Liability
  Three Months
    
    Six MonthsEnded June 30,
    
    Ended June 30,2005
    
    2004
    
    2005
    
    2004Balance at beginning of period
    
    $
    5,294
    
    
    $
    4,151
    
    
    $
    5,315
    
    
    $
    3,614Provision for loan losses
    
    
    1,645
    
    
    
    1,531
    
    
    
    3,675
    
    
    
    3,422Transfers from recourse liability
    
    
    925
    
    
    
    1,115
    
    
    
    1,913
    
    
    
    3,062Gross chargeoffs
    
    
    (4,273
    )
    
    
    (4,159
    )
    
    
    (10,207
    )
    
    
    (9,734
    )Recoveries
    
    
    2,138
    
    
    
    1,909
    
    
    
    5,033
    
    
    
    4,183Balance at end of period
    
    $
    5,729
    
    
    $
    4,547
    
    
    $
    5,729
    
    
    $
    4,547
  Three Months
    
    Six MonthsEnded June 30,
    
    Ended June 30,2005
    
    2004
    
    2005
    
    2004Balance at beginning of period
    
    $
    5,665
    
    
    $
    6,793
    
    
    $
    6,603
    
    
    $
    8,740Reimbursements for losses per
recourse agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Provision for recourse liability
    
    
    168
    
    
    
    
    
    
    
    218
    
    
    
    Transfers to allowance for credit losses
    
    
    (925
    )
    
    
    (1,115
    )
    
    
    (1,913
    )
    
    
    (3,062
    )Balance at end of period
    
    $
    4,908
    
    
    $
    5,678
    
    
    $
    4,908
    
    
    $
    5,678
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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 7  Loans Receivable and Securitizations
  June 30,
    
    December 31,2005
    
    2004Manufactured housing loans  securitized
    
    $
    565,800
    
    
    $
    401,995Manufactured
housing loans  unsecuritized
    
    
    122,538
    
    
    
    170,978Accrued interest receivable
    
    
    3,723
    
    
    
    3,285Deferred fees
    
    
    (2,694
    )
    
    
    (3,100
    )Discount on purchased loans
    
    
    (5,441
    )
    
    
    (4,575
    )Allowance for loan loss
    
    
    (5,729
    )
    
    
    (5,315
    )$
    678,197
    
    
    $
    563,268
   No. of
    
    Principal
    
    % ofDays delinquent
    
    Loans
    
    Balance
    
    Portfolio31-60
    
    
    115
    
    
    $
    4,526
    
    
    
    2.8
    %61-90
    
    
    43
    
    
    $
    1,618
    
    
    
    1.0
    %Greater than 90
    
    
    208
    
    
    $
    9,728
    
    
    
    5.9
    %
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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 7  Loans Receivable and Securitizations (Continued)
  Note 8 Debt
  June 30,
    
    December 31,2005
    
    2004Warehouse financing
    
    $
    82,128
    
    
    $
    107,373Securitization financing
    
    
    463,292
    
    
    
    328,388Notes
payable  servicing advances
    
    
    1,774
    
    
    
    Repurchase agreements
    
    
    22,073
    
    
    
    20,153$
    569,267
    
    
    $
    455,914
 Notes
Payable  Citigroup
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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 8  Debt (Continued)
 Repurchase Agreements
 Notes Payable  2004-A Securitization 
 Notes Payable  2004-B Securitization 
 Notes Payable  2005-A Securitization 
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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 8  Debt (Continued)
 Notes Payable  Servicing Advances 
  June 30, 2005
    
    December 31, 2004Average
    
    Average
    
    Average
    
    AverageBalance
    
    Rate
    
    Balance
    
    RateNotes payable  Citigroup
    
    $
    127,380
    
    
    
    4.5
    %
    
    $
    139,115
    
    
    
    3.9
    %Notes payable  2004-A securitization
    
    $
    161,728
    
    
    
    4.7
    %
    
    $
    163,088
    
    
    
    4.4
    %Notes payable  2004-B securitization
    
    $
    155,857
    
    
    
    4.9
    %
    
    $
    42,299
    
    
    
    4.8
    %Notes payable  2005-A securitization
    
    $
    45,257
    
    
    
    5.0
    %
    
    $
    
    
    
    
    Repurchase agreement
    
    $
    21,358
    
    
    
    3.6
    %
    
    $
    17,573
    
    
    
    2.3
    %Note payable   servicing advances
    
    $
    573
    
    
    
    8.2
    %
    
    $
    553
    
    
    
    7.0
    %
 Note 9  Equity Incentive Plan
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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 10  Derivative Instruments and Hedging Activity
       17




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Origen Financial, Inc.
 Notes to Consolidated Financial Statements (Unaudited)
 Note 11  Stockholders Equity
   Note 12  Subsequent Events
   18




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Managements Discussion and Analysis of Financial Condition and Results of Operations
  
    
    the performance of our manufactured housing loans;
    
    our ability to borrow at favorable rates and terms;
    
    the supply of manufactured housing loans;
    
    interest rate levels and changes in the yield curve (which is formed by the
differing Treasury rates paid on one, two, three, five, ten and 30 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; and
    
    general economic conditions in the markets in which we operate.
   19




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Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
  Critical Accounting Policies
    20




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Managements Discussion and Analysis of Financial Condition and Results of Operations
 Results of Operations
 Comparison of the three months ended June 30, 2005 and 2004.
 Net Income
  Interest Income
   21




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Managements Discussion and Analysis of Financial Condition and Results of Operations
  2005
    
    2004Average
    
    
    
    
    
    Yield/
    
    Average
    
    
    
    
    
    Yield/Balance
    
    Interest
    
    Rate
    
    Balance
    
    Interest
    
    RateInterest earning assets:Manufactured housing loans
    
    $
    650,141
    
    
    $
    13,546
    1
    
    
    8.33
    %
    
    $
    430,227
    
    
    $
    9,318
    
    
    
    8.66
    %Investment securities
    
    
    41,031
    
    
    
    961
    
    
    
    9.37
    %
    
    
    34,217
    
    
    
    664
    
    
    
    7.76
    %Other
    
    
    18,357
    
    
    
    115
    
    
    
    2.52
    %
    
    
    16,754
    
    
    
    52
    
    
    
    1.24
    %Total
    
    $
    709,529
    
    
    $
    14,622
    
    
    
    8.24
    %
    
    $
    481,198
    
    
    $
    10,034
    
    
    
    8.34
    %Interest bearing liabilities2:Loan funding facilities
    
    $
    527,213
    
    
    $
    6,455
    
    
    
    4.90
    %
    
    $
    328,469
    
    
    $
    3,174
    
    
    
    3.87
    %Repurchase
agreement 
investment securities
    

    
    22,091
    
    
    
    212
    
    
    
    3.85
    %
    
    
    23,703
    
    
    
    107
    
    
    
    1.81
    %Notes payable  servicing
advances
    
    
    742
    
    
    
    14
    
    
    
    7.43
    %
    
    
    882
    
    
    
    15
    
    
    
    6.80
    %Total
    
    $
    550,046
    
    
    $
    6,681
    
    
    
    4.86
    %
    
    $
    353,054
    
    
    $
    3,296
    
    
    
    3.73
    %Net interest income and
interest rate spread
    
    
    
    
    
    $
    7,941
    
    
    
    3.38
    %
    
    
    
    
    
    $
    6,738
    
    
    
    4.61
    %Net yield on average interest
earning assets
    
    
    
    
    
    
    
    
    
    
    4.48
    %
    
    
    
    
    
    
    
    
    
    
    5.60
    %
 
 1
    
    Net of loan servicing fees.2
    
    Includes facility fees. 22




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Volume
    
    Rate
    
    TotalInterest earning assets:Manufactured housing loans
    
    $
    4,582
    
    
    $
    (354
    )
    
    $
    4,228Investment securities
    
    
    160
    
    
    
    137
    
    
    
    297Other
    
    
    10
    
    
    
    53
    
    
    
    63Total interest income
    
    $
    4,752
    
    
    $
    (164
    )
    
    $
    4,588Interest bearing liabilities:Loan funding facilities
    
    $
    2,434
    
    
    $
    847
    
    
    $
    3,281Repurchase
agreement 
investment securities
    
    
    (16
    )
    
    
    121
    
    
    
    105Notes payable  servicing
advances
    
    
    (3
    )
    
    
    2
    
    
    
    (1
    )Total interest expense
    
    $
    2,415
    
    
    $
    970
    
    
    $
    3,385Increase in net interest income
    
    
    
    
    
    
    
    
    
    $
    1,203
 Non-interest Income
  Provision for Losses
  23




---



##### Table of Contents



Managements Discussion and Analysis of Financial Condition and Results of Operations
  Non-interest Expenses
       24




---



##### Table of Contents



Managements Discussion and Analysis of Financial Condition and Results of Operations
  Comparison of the six months ended June 30, 2005 and 2004.
 Net Income
  Interest Income
   25




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
  2005
    
    2004Average
    
    
    
    
    
    Yield/
    
    Average
    
    
    
    
    
    Yield/Balance
    
    Interest
    
    Rate
    
    Balance
    
    Interest
    
    RateInterest earning assets:Manufactured housing loans
    
    $
    616,277
    
    
    $
    25,768
    
    
    
    8.36
    %
    
    $
    408,327
    
    
    $
    17,962
    
    
    
    8.80
    %Investment securities
    
    
    39,555
    
    
    
    1,830
    
    
    
    9.25
    %
    
    
    20,214
    
    
    
    762
    
    
    
    7.54
    %Other
    
    
    16,538
    
    
    
    190
    
    
    
    2.30
    %
    
    
    14,376
    
    
    
    80
    
    
    
    1.11
    %Total
    
    $
    672,370
    
    
    $
    27,788
    
    
    
    8.27
    %
    
    $
    442,917
    
    
    $
    18,804
    
    
    
    8.49
    %Interest bearing liabilities:Loan funding facilities
    
    $
    490,222
    
    
    $
    11,682
    
    
    
    4.77
    %
    
    $
    308,014
    
    
    $
    6,161
    
    
    
    4.00
    %Repurchase agreement -
investment securities
    
    
    21,358
    
    
    
    386
    
    
    
    3.62
    %
    
    
    13,919
    
    
    
    126
    
    
    
    1.81
    %Notes payable  servicing
advances
    
    
    573
    
    
    
    23
    
    
    
    8.16
    %
    
    
    1,348
    
    
    
    28
    
    
    
    4.15
    %Total
    
    $
    512,153
    
    
    $
    12,091
    
    
    
    4.71
    %
    
    $
    323,281
    
    
    $
    6,315
    
    
    
    3.91
    %Net interest income and
interest rate spread
    
    
    
    
    
    $
    15,697
    
    
    
    3.54
    %
    
    
    
    
    
    $
    12,489
    
    
    
    4.58
    %Net yield on average interest
earning assets
    
    
    
    
    
    
    
    
    
    
    4.67
    %
    
    
    
    
    
    
    
    
    
    
    5.64
    %
 26




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
  Volume
    
    Rate
    
    TotalInterest earning assets:Manufactured housing loans
    
    $
    8,695
    
    
    $
    (889
    )
    
    $
    7,806Investment securities
    
    
    895
    
    
    
    173
    
    
    
    1,068Other
    
    
    25
    
    
    
    85
    
    
    
    110Total interest income
    
    $
    9,615
    
    
    $
    (631
    )
    
    $
    8,984Interest bearing liabilities:Loan funding facilities
    
    $
    4,342
    
    
    $
    1,179
    
    
    $
    5,521Repurchase agreement -
investment securities
    
    
    135
    
    
    
    125
    
    
    
    260Notes payable  servicing
advances
    
    
    (32
    )
    
    
    27
    
    
    
    (5
    )Total interest expense
    
    $
    4,445
    
    
    $
    1,331
    
    
    $
    5,776Increase in net interest income
    
    
    
    
    
    
    
    
    
    $
    3,208
 Non-interest Income
  Provision for Losses
  27




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
  Non-interest Expenses
       28




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
  Receivable Portfolio and Asset Quality
   29




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
  June 30,
    
    December 31,2005
    
    2004Principal balance loans receivable
    
    $
    684,529
    
    
    $
    572,973Number of loans receivable
    
    
    15,524
    
    
    
    13,358Average loan balance
    
    $
    44
    
    
    $
    43Weighted average loan coupon (a)
    
    
    9.65
    %
    
    
    9.86
    %Weighted average initial term
    
    21 years
    
    20 years
 
 (a)
    
    The weighted average loan coupon includes an imbedded servicing fee rate
resulting from securitization or sale of the loan but accounted for as a financing.  June 30, 2005
    
    December 31, 2004No. of
    
    Principal
    
    % of
    
    No. of
    
    Principal
    
    % ofDays delinquent
    
    Loans
    
    Balance
    
    Portfolio
    
    Loans
    
    Balance
    
    Portfolio31-60
    
    
    168
    
    
    $
    5,974
    
    
    
    0.9
    %
    
    
    146
    
    
    $
    5,253
    
    
    
    0.9
    %61-90
    
    
    72
    
    
    
    2,884
    
    
    
    0.4
    %
    
    
    80
    
    
    
    3,014
    
    
    
    0.5
    %Greater than 90
    
    
    166
    
    
    
    6,770
    
    
    
    1.0
    %
    
    
    195
    
    
    
    7,637
    
    
    
    1.3
    %
   30




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
    31




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
 Liquidity and Capital Resources
     32




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
     33




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
   34




---



##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
   35




---



##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  Maturity0 to 3
    
    4 to 12
    
    1 to 5
    
    Over 5months
    
    months
    
    years
    
    years
    
    TotalAssetsCash and equivalents
    
    $
    3,428
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    3,428Restricted cash
    
    
    10,898
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,898Loans receivable, net
    
    
    3,227
    
    
    
    10,159
    
    
    
    68,480
    
    
    
    596,331
    
    
    
    678,197Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,863
    
    
    
    41,863Furniture, fixtures and equipment, net
    
    
    258
    
    
    
    808
    
    
    
    2,164
    
    
    
    
    
    
    
    3,230Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,277
    
    
    
    32,277Other assets
    
    
    11,473
    
    
    
    7,981
    
    
    
    5,280
    
    
    
    3,264
    
    
    
    27,998Total assets
    
    $
    29,284
    
    
    $
    18,948
    
    
    $
    75,924
    
    
    $
    673,735
    
    
    $
    797,891Liabilities and Stockholders EquityWarehouse financing
    
    $
    198
    
    
    $
    81,930
    
    
    $
    
    
    
    $
    
    
    
    $
    82,128Securitization financing
    
    
    2,204
    
    
    
    6,941
    
    
    
    46,780
    
    
    
    407,367
    
    
    
    463,292Repurchase agreements
    
    
    22,073
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,073Notes payable  servicing advances
    
    
    1,774
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,774Recourse liability
    
    
    383
    
    
    
    948
    
    
    
    2,215
    
    
    
    1,362
    
    
    
    4,908Other liabilities
    
    
    19,114
    
    
    
    369
    
    
    
    
    
    
    
    887
    
    
    
    20,370Total liabilities
    
    
    45,746
    
    
    
    90,188
    
    
    
    48,995
    
    
    
    409,616
    
    
    
    594,545Preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    125Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    254
    
    
    
    254Paid-in-capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    220,534
    
    
    
    220,534Accumulated other comprehensive loss
    
    
    (802
    )
    
    
    (328
    )
    
    
    (1,140
    )
    
    
    (476
    )
    
    
    (2,746
    )Unearned stock compensation
    
    
    (578
    )
    
    
    (1,593
    )
    
    
    (1,191
    )
    
    
    
    
    
    
    (3,362
    )Retained deficit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,459
    )
    
    
    (11,459
    )Total stockholders equity
    
    
    (1,380
    )
    
    
    (1,921
    )
    
    
    (2,331
    )
    
    
    208,978
    
    
    
    203,346Total liabilities and stockholders equity
    
    $
    44,366
    
    
    $
    88,267
    
    
    $
    46,664
    
    
    $
    618,594
    
    
    $
    797,891Interest sensitivity gap
    
    $
    (15,082
    )
    
    $
    (69,319
    )
    
    $
    29,260
    
    
    $
    55,141Cumulative interest sensitivity gap
    
    $
    (15,082
    )
    
    $
    (84,401
    )
    
    $
    (55,141
    )
    
    
    Cumulative interest sensitivity gap to
total interest earning assets
    
    
    (1.89
    %)
    
    
    (10.58
    %)
    
    
    (6.91
    %)
    
    
    
 36




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    37




---



##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  Contractual MaturityThere-2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    after
    
    TotalInterest sensitive assetsLoans receivable
    
    $
    6,532
    
    
    $
    14,045
    
    
    $
    15,462
    
    
    $
    17,022
    
    
    $
    18,739
    
    
    $
    606,397
    
    
    $
    678,197Average interest rate
    
    
    9.65
    %
    
    
    9.65
    %
    
    
    9.65
    %
    
    
    9.65
    %
    
    
    9.65
    %
    
    
    9.65
    %
    
    
    9.65
    %Interest bearing deposits
    
    
    14,279
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,279Average interest rate
    
    

    2.30
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.30
    %Loan sale proceeds receivable

    
    
    264
    
    
    
    397
    
    
    
    269
    
    
    
    176
    
    
    
    114
    
    
    
    525
    
    
    
    1,745Average interest rate
    
    
    1.50
    %
    
    
    1.50
    %
    
    
    1.50
    %
    
    
    1.50
    %
    
    
    1.50
    %
    
    
    1.50
    %
    
    
    1.50
    %Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,863
    
    
    
    41,863Average interest rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.96
    %
    
    
    7.96
    %Residual interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    724
    
    
    
    724Average interest rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15.00
    %
    
    
    15.00
    %Total interest sensitive
assets
    
    $
    21,075
    
    
    $
    14,442
    
    
    $
    15,731
    
    
    $
    17,198
    
    
    $
    18,853
    
    
    $
    649,509
    
    
    $
    736,808Interest sensitive liabilitiesWarehouse financing
    
    $
    391
    
    
    $
    80,737
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    81,128Average interest rate
    
    
    4.54
    %
    
    
    4.54
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.54
    %Securitization financing
    
    
    4,462
    
    
    
    9,594
    
    
    
    10,562
    
    
    
    11,628
    
    
    
    12,801
    
    
    
    414,245
    
    
    
    463,292Average interest rate
    
    
    4.84
    %
    
    
    4.84
    %
    
    
    4.84
    %
    
    
    4.84
    %
    
    
    4.84
    %
    
    
    4.84
    %
    
    
    4.84
    %Repurchase agreements
    
    
    22,073
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,073Average interest rate
    
    
    3.97
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.97
    %Note payable  servicing
advance
    
    
    1,774
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,774Average interest rate
    
    
    8.16
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8.16
    %Recourse liability
    
    
    729
    
    
    
    1,103
    
    
    
    751
    
    
    
    498
    
    
    
    328
    
    
    
    1,499
    
    
    
    4,908Average interest rate
    
    
    10.36
    %
    
    
    10.36
    %
    
    
    10.36
    %
    
    
    10.36
    %
    
    
    10.36
    %
    
    
    10.36
    %
    
    
    10.36
    %Total interest sensitive
liabilities
    
    $
    29,429
    
    
    $
    91,434
    
    
    $
    11,313
    
    
    $
    12,126
    
    
    $
    13,129
    
    
    $
    415,744
    
    
    $
    573,175
 38




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##### Table of Contents



Item 4.
    
    Controls and Procedures
        39




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##### Table of Contents



PART II
    
    OTHER INFORMATION
 
 ITEM 4. Submission of Matters to a Vote of Security Holders
  Nominee
    
    For
    
    Against
    
    WithheldPaul A. Halpern
    
    
    20,434,704
    
    
    
    0
    
    
    
    2,448,780Ronald A. Klein
    
    
    20,518,417
    
    
    
    0
    
    
    
    2,365,067Richard H. Rogel
    
    
    21,694,456
    
    
    
    0
    
    
    
    1,189,028Gary A. Shiffman
    
    
    19,816,387
    
    
    
    0
    
    
    
    3,067,097Michael J. Wechsler
    
    
    21,844,646
    
    
    
    0
    
    
    
    1,038,838James A. Williams
    
    
    21,844,672
    
    
    
    0
    
    
    
    1,038,812
 
 ITEM 6. Exhibits and Reports on Form 8-K
  Exhibit No.
    
    Description10.1
    
    First Amendment to Origen Financial, Inc. 2003 Equity Incentive Plan#31.1
    
    Certification of Chief Executive Officer Required by Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended.31.2
    
    Certification of Chief Financial Officer Required by Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended.32.1
    
    Certification of Chief Executive Officer and Chief Financial
Officer Required by Rule 13a-14(b) of the Securities Exchange
Act of 1934, as amended.#
    
    Management contract or compensatory plan or arrangement.
 40




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##### Table of Contents



41




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##### Table of Contents



SIGNATURES
   ORIGEN FINANCIAL, INC.BY:
    
    /s/ W. Anderson Geater, Jr.W. Anderson Geater, Jr., Chief
Financial Officer and Secretary
(Duly authorized officer and principal
financial officer)
 42




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##### Table of Contents



ORIGEN FINANCIAL, INC.
 EXHIBIT INDEX
 Exhibit No.
    
    Description10.1
    
    First Amendment to Origen Financial, Inc. 2003 Equity Incentive Plan#31.1
    
    Certification of Chief Executive Officer Required by Rule 13a-14(a) of
the Securities Exchange Act of 1934, as amended.31.2
    
    Certification of Chief Financial Officer Required by Rule 13a-14(a) of the
Securities Exchange Act of 1934, as amended.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer
Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as
amended.# Management contract or compensatory plan or arrangement.
 43