##### Table of Contents



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, 2007.
 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 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, 2007 and
December 31, 2006
    
    
    3Consolidated Statements of Operations for the periods
ended June 30, 2007 and 2006
    
    
    4Consolidated Statements of Comprehensive Income for the periods
ended June 30, 2007 and 2006
    
    
    5Consolidated Statements of Cash Flows for the six months
ended June 30, 2007 and 2006
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    17Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    28Item 4.
    
    Controls and Procedures
    
    
    30Part II
    
    Other InformationItem 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    31Item 6.
    
    Exhibits
    
    
    31Signatures
    
    
    32Certification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Chief Executive Officer and Chief Financial Officer
  2




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
 
 Origen Financial, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
As of June 30, 2007 and December 31, 2006
 June 30, 2007
    
    
    December 31, 2006(Unaudited)ASSETSAssetsCash and cash equivalents
    
    $
    1,158
    
    
    $
    2,566Restricted cash
    
    
    19,168
    
    
    
    15,412Investments held to maturity
    
    
    41,823
    
    
    
    41,538Loans receivable, net of allowance for losses of
$7,342 and $8,456, respectively
    
    
    1,096,461
    
    
    
    950,226Servicing advances
    
    
    5,833
    
    
    
    7,741Servicing rights
    
    
    2,323
    
    
    
    2,508Furniture, fixtures and equipment, net
    
    
    3,294
    
    
    
    3,513Repossessed houses
    
    
    4,229
    
    
    
    3,046Goodwill
    
    
    32,277
    
    
    
    32,277Other assets
    
    
    20,154
    
    
    
    14,240Total assets
    
    $
    1,226,720
    
    
    $
    1,073,067LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesWarehouse financing
    
    $
    145,132
    
    
    $
    131,520Securitization financing
    
    
    817,003
    
    
    
    685,013Repurchase agreements
    
    
    23,269
    
    
    
    23,582Notes payable  servicing advances
    
    
    557
    
    
    
    2,185Other liabilities
    
    
    27,414
    
    
    
    26,303Total liabilities
    
    
    1,013,375
    
    
    
    868,603Stockholders EquityPreferred stock, $.01 par value, 10,000,000 shares
authorized; 125 shares issued and outstanding at
June 30, 2007 and December 31, 2006, $1,000 per
share liquidation preference
    
    
    125
    
    
    
    125Common stock, $.01 par value, 125,000,000 shares
authorized; 25,876,868 and 25,865,401 shares issued
and outstanding at June 30, 2007 and December 31,
2006, respectively
    
    
    259
    
    
    
    259Additional paid-in-capital
    
    
    220,323
    
    
    
    219,759Accumulated other comprehensive income (loss)
    
    
    5,751
    
    
    
    (625
    )Distributions in excess of earnings
    
    
    (13,113
    )
    
    
    (15,054
    )Total stockholders equity
    
    
    213,345
    
    
    
    204,464Total liabilities and stockholders equity
    
    $
    1,226,720
    
    
    $
    1,073,067
 The accompanying notes are an integral part of these financial statements.
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##### Table of Contents



Origen Financial, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except share data)
For the periods ended June 30, 2007 and 2006
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest IncomeTotal interest income
    
    $
    22,583
    
    
    $
    18,057
    
    
    $
    43,407
    
    
    $
    35,265Total interest expense
    
    
    14,089
    
    
    
    10,282
    
    
    
    27,009
    
    
    
    19,877Net interest income before loan losses
    
    
    8,494
    
    
    
    7,775
    
    
    
    16,398
    
    
    
    15,388Provision for loan losses
    
    
    1,806
    
    
    
    1,201
    
    
    
    3,594
    
    
    
    3,326Net interest income after loan losses
    
    
    6,688
    
    
    
    6,574
    
    
    
    12,804
    
    
    
    12,062Non-interest incomeServicing income
    
    
    4,451
    
    
    
    3,507
    
    
    
    8,603
    
    
    
    6,973Other
    
    
    952
    
    
    
    702
    
    
    
    1,693
    
    
    
    1,415Total non-interest income
    
    
    5,403
    
    
    
    4,209
    
    
    
    10,296
    
    
    
    8,388Non-interest ExpensesPersonnel
    
    
    6,371
    
    
    
    6,300
    
    
    
    12,917
    
    
    
    12,267Loan origination and servicing
    
    
    578
    
    
    
    336
    
    
    
    1,059
    
    
    
    712State business taxes
    
    
    167
    
    
    
    77
    
    
    
    237
    
    
    
    175Other operating
    
    
    2,150
    
    
    
    2,066
    
    
    
    4,345
    
    
    
    4,158Total non-interest expense
    
    
    9,266
    
    
    
    8,779
    
    
    
    18,558
    
    
    
    17,312Net income before income taxes and
cumulative effect of change in
accounting principle
    
    
    2,825
    
    
    
    2,004
    
    
    
    4,542
    
    
    
    3,138Income tax expense (benefit)
    
    
    (4
    )
    
    
    
    
    
    
    8
    
    
    
    Net income before cumulative effect
of change in accounting principle
    
    
    2,829
    
    
    
    2,004
    
    
    
    4,534
    
    
    
    3,138Cumulative effect of change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46NET INCOME
    
    $
    2,829
    
    
    $
    2,004
    
    
    $
    4,534
    
    
    $
    3,184Weighted average common shares
outstanding, basic
    
    
    25,292,335
    
    
    
    25,110,575
    
    
    
    25,251,000
    
    
    
    25,046,090Weighted average common shares
outstanding, diluted
    
    
    25,423,422
    
    
    
    25,149,949
    
    
    
    25,357,808
    
    
    
    25,137,379Earnings per common share before
cumulative effect of change in
accounting principle:Basic
    
    $
    0.11
    
    
    $
    0.08
    
    
    $
    0.18
    
    
    $
    0.12Diluted
    
    $
    0.11
    
    
    $
    0.08
    
    
    $
    0.18
    
    
    $
    0.12Earnings per common share:Basic
    
    $
    0.11
    
    
    $
    0.08
    
    
    $
    0.18
    
    
    $
    0.13Diluted
    
    $
    0.11
    
    
    $
    0.08
    
    
    $
    0.18
    
    
    $
    0.13
 The accompanying notes are an integral part of these financial statements.
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Origen Financial, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands)
For the periods ended June 30, 2007 and 2006
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    2,829
    
    
    $
    2,004
    
    
    $
    4,534
    
    
    $
    3,184Other comprehensive income:Net unrealized gains on interest rate swaps
    
    
    7,242
    
    
    
    1,527
    
    
    
    6,600
    
    
    
    2,848Reclassification adjustment for net gains
included in net income
    
    
    (203
    )
    
    
    (12
    )
    
    
    (224
    )
    
    
    (7
    )Total other comprehensive income
    
    
    7,039
    
    
    
    1,515
    
    
    
    6,376
    
    
    
    2,841Comprehensive income
    
    $
    9,868
    
    
    $
    3,519
    
    
    $
    10,910
    
    
    $
    6,025
 The accompanying notes are an integral part of these financial statements.
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Origen Financial, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
For the six months ended June 30, 2007 and 2006
  2007
    
    
    2006Cash Flows From Operating ActivitiesNet income
    
    $
    4,534
    
    
    $
    3,184Adjustments to reconcile net income to cash provided by
operating activities:Provision for loan losses
    
    
    3,594
    
    
    
    3,326Investment impairment
    
    
    
    
    
    
    114Depreciation and amortization
    
    
    2,633
    
    
    
    3,051Compensation expense recognized under share-based
compensation plans
    
    
    784
    
    
    
    1,092Cumulative effect of change in accounting principal
    
    
    
    
    
    
    (46
    )Proceeds from loan sales
    
    
    
    
    
    
    577(Increase) decrease in servicing advances
    
    
    1,908
    
    
    
    (2,365
    )(Increase) decrease in other assets
    
    
    (5,100
    )
    
    
    570Increase (decrease) in accounts payable and other liabilities
    
    
    3,258
    
    
    
    (983
    )Net cash provided by operating activities
    
    
    11,611
    
    
    
    8,520Cash Flows From Investing ActivitiesIncrease in restricted cash
    
    
    (3,756
    )
    
    
    (459
    )Origination and purchase of loans
    
    
    (204,277
    )
    
    
    (139,915
    )Principal collections on loans
    
    
    49,459
    
    
    
    41,764Proceeds from sale of repossessed houses
    
    
    5,140
    
    
    
    5,720Capital expenditures
    
    
    (353
    )
    
    
    (342
    )Net cash used in investing activities
    
    
    (153,787
    )
    
    
    (93,232
    )Cash Flows From Financing ActivitiesNet proceeds from issuance of common stock
    
    
    101
    
    
    
    Retirement of common stock
    
    
    (322
    )
    
    
    (288
    )Dividends paid
    
    
    (2,593
    )
    
    
    (764
    )Proceeds from securitization financing
    
    
    184,389
    
    
    
    Repayment of securitization financing
    
    
    (52,478
    )
    
    
    (44,249
    )Repayment of advances under repurchase agreements
    
    
    (313
    )
    
    
    Proceeds from warehouse financing
    
    
    201,480
    
    
    
    129,284Repayment of warehouse financing
    
    
    (187,868
    )
    
    
    (4,506
    )Change in notes payable  servicing advances, net
    
    
    (1,628
    )
    
    
    (1,431
    )Net cash provided by financing activities
    
    
    140,768
    
    
    
    78,046NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (1,408
    )
    
    
    (6,666
    )Cash and cash equivalents, beginning of period
    
    
    2,566
    
    
    
    8,307Cash and cash equivalents, end of period
    
    $
    1,158
    
    
    $
    1,641Supplemental disclosures of cash flow information:Cash paid for interest
    
    $
    26,618
    
    
    $
    19,394Cash paid for income taxes
    
    $
    25
    
    
    $
    Non-cash financing activities:Non-vested common stock issued as unearned compensation
    
    $
    328
    
    
    $
    1,322Loans transferred to repossessed houses and held for sale
    
    $
    9,609
    
    
    $
    9,589
 The accompanying notes are an integral part of these financial statements.
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##### Table of Contents



Origen Financial, Inc.
 
 Notes to Consolidated Financial Statements (Unaudited)
 Note 1  Basis of Presentation
    Note 2  Recent Accounting Pronouncements
 Accounting for Certain Hybrid Instruments
  Accounting for Servicing of Financial Assets
  7




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Origen Financial, Inc.
Notes to Consolidated Financial Statements (Unaudited)
  Note 2  Recent Accounting Pronouncements, continued:
 Accounting for Uncertainty in Income Taxes
  Fair Value Measurements
  Fair Value Option
  8




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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 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Numerator:Net income
    
    $
    2,829
    
    
    $
    2,004
    
    
    $
    4,534
    
    
    $
    3,184Preferred stock dividends
    
    
    (4
    )
    
    
    (4
    )
    
    
    (8
    )
    
    
    (8
    )Income available to common shareholders
    
    $
    2,825
    
    
    $
    2,000
    
    
    $
    4,526
    
    
    $
    3,176Denominator:Weighted average common shares for
basic EPS
    
    
    25,292
    
    
    
    25,111
    
    
    
    25,251
    
    
    
    25,046Effect of dilutive securities:Incremental shares  non-vested stock
awards
    
    
    131
    
    
    
    39
    
    
    
    107
    
    
    
    91Weighted average common shares for
diluted EPS
    
    
    25,423
    
    
    
    25,150
    
    
    
    25,358
    
    
    
    25,137Basic EPS
    
    $
    0.11
    
    
    $
    0.08
    
    
    $
    0.18
    
    
    $
    0.13Diluted EPS
    
    $
    0.11
    
    
    $
    0.08
    
    
    $
    0.18
    
    
    $
    0.13
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Origen Financial, Inc.
Notes to Consolidated Financial Statements (Unaudited)
 Note 4  Investments
  Investments Accounted for Under the Provisions of SFAS No. 115
  Investments Accounted for Under the Provisions of SOP 03-3
  10




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Origen Financial, Inc.
Notes to Consolidated Financial Statements (Unaudited)
 Note 5  Loans Receivable
  June 30, 2007
    
    
    December 31, 2006Manufactured housing loans  securitized
    
    $
    971,349
    
    
    $
    825,811Manufactured housing loans  unsecuritized
    
    
    129,396
    
    
    
    130,828Accrued interest receivable
    
    
    5,218
    
    
    
    4,840Deferred loan origination costs
    
    
    3,623
    
    
    
    1,271Discount on purchased loans
    
    
    (4,870
    )
    
    
    (3,155
    )Allowance for purchased loans
    
    
    (913
    )
    
    
    (913
    )Allowance for loan losses
    
    
    (7,342
    )
    
    
    (8,456
    )$
    1,096,461
    
    
    $
    950,226
   No. of
    
    Principal
    
    % ofDays delinquent
    
    Loans
    
    Balance
    
    Portfolio3160
    
    
    72
    
    
    $
    2,514
    
    
    
    2.1
    %6190
    
    
    27
    
    
    
    1,081
    
    
    
    0.9
    %Greater than 90
    
    
    64
    
    
    
    2,427
    
    
    
    2.0
    %
 Note 6  Allowance for Credit Losses
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Balance at beginning of period
    
    $
    7,553
    
    
    $
    9,670
    
    
    $
    8,456
    
    
    $
    10,017Provision for loan losses
    
    
    1,806
    
    
    
    1,201
    
    
    
    3,594
    
    
    
    3,326Gross charge-offs
    
    
    (4,570
    )
    
    
    (4,167
    )
    
    
    (10,228
    )
    
    
    (8,623
    )Recoveries
    
    
    2,553
    
    
    
    2,075
    
    
    
    5,520
    
    
    
    4,059Balance at end of period
    
    $
    7,342
    
    
    $
    8,779
    
    
    $
    7,342
    
    
    $
    8,779
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Origen Financial, Inc.
Notes to Consolidated Financial Statements (Unaudited)
 Note 7 Debt
  June 30,
    
    
    December 31,2007
    
    
    2006Warehouse financing
    
    $
    145,132
    
    
    $
    131,520Securitization financing
    
    
    817,003
    
    
    
    685,013Repurchase agreements
    
    
    23,269
    
    
    
    23,582Notes payable  servicing advances
    
    
    557
    
    
    
    2,185$
    985,961
    
    
    $
    842,300
 Warehouse Financing  Citigroup
  Securitization Financing  2004-A Securitization
  Securitization Financing  2004-B Securitization
  Securitization Financing  2005-A Securitization
  12




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Origen Financial, Inc.
Notes to Consolidated Financial Statements (Unaudited)
 Note 7 Debt (Continued)
 Securitization Financing  2005-B Securitization
  Securitization Financing  2006-A Securitization
  Securitization Financing  2007-A Securitization
  Repurchase Agreements  Citigroup
  13




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Origen Financial, Inc.
Notes to Consolidated Financial Statements (Unaudited)
 Note 7  Debt (Continued)
 Notes Payable  Servicing Advances  JPMorgan Chase Bank, N.A.
   June 30, 2007
    
    December 31, 2006Average
    
    Average
    
    Average
    
    AverageBalance
    
    Rate
    
    Balance
    
    RateWarehouse
financing  Citigroup (1)
    
    $
    160,322
    
    
    
    7.2
    %
    
    $
    120,649
    
    
    
    7.0
    %Securitization financing  2004-A securitization
    
    
    109,502
    
    
    
    5.6
    %
    
    
    126,655
    
    
    
    5.4
    %Securitization financing  2004-B securitization
    
    
    111,095
    
    
    
    5.6
    %
    
    
    125,849
    
    
    
    5.5
    %Securitization financing  2005-A securitization
    
    
    124,320
    
    
    
    5.4
    %
    
    
    139,842
    
    
    
    5.2
    %Securitization financing  2005-B securitization
    
    
    133,980
    
    
    
    5.8
    %
    
    
    146,178
    
    
    
    5.7
    %Securitization financing  2006-A securitization
    
    
    186,920
    
    
    
    5.9
    %
    
    
    69,158
    
    
    
    6.0
    %Securitization financing  2007-A securitization
    
    
    60,723
    
    
    
    5.6
    %
    
    
    
    
    
    
    Repurchase agreements  Citigroup
    
    
    23,530
    
    
    
    6.1
    %
    
    
    23,582
    
    
    
    5.9
    %Note payable  servicing advances  JPMorgan
Chase Bank, N.A.(2)
    
    
    181
    
    
    
    14.2
    %
    
    
    447
    
    
    
    9.4
    %
 
 (1)
    
    Includes facility fees.(2)
    
    Includes non-use fees.  Note 8  Share-Based Compensation Plan
  14




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Origen Financial, Inc.
Notes to Consolidated Financial Statements (Unaudited)
 Note 9  Derivative Instruments and Hedging Activity
    Cash Flow Hedge Instruments
  15




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##### Table of Contents



Origen Financial, Inc.
Notes to Consolidated Financial Statements (Unaudited)
 Note 9  Derivative Instruments and Hedging Activity (Continued)
  Derivatives Not Designated as Hedge Instruments
  Note 10  Stockholders Equity
    Note 11  Subsequent Events
  16




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Item 2. 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;
    
    conditions in the asset-backed securities market generally and the manufactured housing
asset-backed securities market specifically, including rating agencies views on the
manufactured housing industry;
    
    the supply of manufactured housing loans;
    
    interest rate levels and changes in the yield curve (which is the curve 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;
    
    general economic conditions in the markets in which we operate;
   Overview
  17




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Recent Developments
  Critical Accounting Policies
    18




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Results of Operations
 Comparison of the three months ended June 30, 2007 and 2006
 Net Income
  Interest Income
    2007
    
    
    2006Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateInterest earning assets:Manufactured housing loans (1)
    
    $
    1,051,994
    
    
    $
    21,364
    
    
    
    8.12
    %
    
    $
    824,897
    
    
    $
    16,927
    
    
    
    8.21
    %Investment securities
    
    
    41,254
    
    
    
    962
    
    
    
    9.33
    %
    
    
    41,350
    
    
    
    926
    
    
    
    8.96
    %Other
    
    
    20,033
    
    
    
    258
    
    
    
    5.15
    %
    
    
    16,839
    
    
    
    204
    
    
    
    4.85
    %Total
    
    $
    1,113,281
    
    
    $
    22,584
    
    
    
    8.11
    %
    
    $
    883,086
    
    
    $
    18,057
    
    
    
    8.18
    %Interest bearing liabilities (2):Loan funding facilities
    
    $
    929,909
    
    
    $
    13,723
    
    
    
    5.90
    %
    
    $
    702,681
    
    
    $
    9,924
    
    
    
    5.65
    %Repurchase agreements
    
    
    23,478
    
    
    
    360
    
    
    
    6.13
    %
    
    
    23,582
    
    
    
    348
    
    
    
    5.90
    %Notes payable  servicing advances(3)
    
    
    146
    
    
    
    6
    
    
    
    16.44
    %
    
    
    326
    
    
    
    10
    
    
    
    12.27
    %Total
    
    $
    953,533
    
    
    $
    14,089
    
    
    
    5.91
    %
    
    $
    726,589
    
    
    $
    10,282
    
    
    
    5.66
    %Net interest income and interest rate
spread
    
    
    
    
    
    $
    8,495
    
    
    
    2.20
    %
    
    
    
    
    
    $
    7,775
    
    
    
    2.52
    %Net yield on average interest earning
assets (4)
    
    
    
    
    
    
    
    
    
    
    3.05
    %
    
    
    
    
    
    
    
    
    
    
    3.52
    %
 
 (1)
    
    Net of loan servicing fees.(2)
    
    Includes facility fees.(3)
    
    Includes non-use fees.(4)
    
    Amount is calculated as net interest income divided by total average interest earning assets. 19




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##### 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
    
    $
    4,660
    
    
    $
    (223
    )
    
    $
    4,437Investment securities
    
    
    (2
    )
    
    
    38
    
    
    
    36Other
    
    
    39
    
    
    
    15
    
    
    
    54Total interest income
    
    $
    4,697
    
    
    $
    (170
    )
    
    $
    4,527Interest bearing liabilities:Loan funding facilities
    
    $
    3,209
    
    
    $
    590
    
    
    $
    3,799Repurchase agreements
    
    
    (2
    )
    
    
    14
    
    
    
    12Notes payable  servicing advances
    
    
    (5
    )
    
    
    1
    
    
    
    (4
    )Total interest expense
    
    $
    3,202
    
    
    $
    605
    
    
    $
    3,807Increase in net interest income
    
    
    
    
    
    
    
    
    
    $
    720
 Non-interest Income
  Provision for Losses
  Non-interest Expenses
    20




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Results of Operations
 Comparison of the six months ended June 30, 2007 and 2006
 Net Income
  Interest Income
    2007
    
    
    2006Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateInterest earning assets:Manufactured housing loans (1)
    
    $
    1,010,441
    
    
    $
    41,062
    
    
    
    8.13
    %
    
    $
    803,846
    
    
    $
    33,028
    
    
    
    8.22
    %Investment securities
    
    
    41,243
    
    
    
    1,913
    
    
    
    9.28
    %
    
    
    41,356
    
    
    
    1,877
    
    
    
    9.08
    %Other
    
    
    17,842
    
    
    
    432
    
    
    
    4.84
    %
    
    
    16,594
    
    
    
    360
    
    
    
    4.34
    %Total
    
    $
    1,069,526
    
    
    $
    43,407
    
    
    
    8.12
    %
    
    $
    861,796
    
    
    $
    35,265
    
    
    
    8.18
    %Interest bearing liabilities (2):Loan funding facilities
    
    $
    886,862
    
    
    $
    26,276
    
    
    
    5.93
    %
    
    $
    681,814
    
    
    $
    19,192
    
    
    
    5.63
    %Repurchase agreements
    
    
    23,530
    
    
    
    720
    
    
    
    6.12
    %
    
    
    23,582
    
    
    
    661
    
    
    
    5.61
    %Notes payable  servicing advances(3)
    
    
    181
    
    
    
    13
    
    
    
    14.36
    %
    
    
    498
    
    
    
    24
    
    
    
    9.64
    %Total
    
    $
    910,573
    
    
    $
    27,009
    
    
    
    5.93
    %
    
    $
    705,894
    
    
    $
    19,877
    
    
    
    5.63
    %Net interest income and interest rate
spread
    
    
    
    
    
    $
    16,398
    
    
    
    2.18
    %
    
    
    
    
    
    $
    15,388
    
    
    
    2.55
    %Net yield on average interest earning
assets (4)
    
    
    
    
    
    
    
    
    
    
    3.07
    %
    
    
    
    
    
    
    
    
    
    
    3.57
    %
 
 (1)
    
    Net of loan servicing fees.(2)
    
    Includes facility fees.(3)
    
    Includes non-use fees.(4)
    
    Amount is calculated as net interest income divided by total average interest earning assets. 21




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Volume
    
    
    Rate
    
    
    TotalInterest earning assets:Manufactured housing loans
    
    $
    8,488
    
    
    $
    (454
    )
    
    $
    8,034Investment securities
    
    
    (5
    )
    
    
    41
    
    
    
    36Other
    
    
    27
    
    
    
    45
    
    
    
    72Total interest income
    
    $
    8,510
    
    
    $
    (368
    )
    
    $
    8,142Interest bearing liabilities:Loan funding facilities
    
    $
    5,772
    
    
    $
    1,312
    
    
    $
    7,084Repurchase agreements
    
    
    (1
    )
    
    
    60
    
    
    
    59Notes payable  servicing advances
    
    
    (15
    )
    
    
    4
    
    
    
    (11
    )Total interest expense
    
    $
    5,756
    
    
    $
    1,376
    
    
    $
    7,132Increase in net interest income
    
    
    
    
    
    
    
    
    
    $
    1,010
 Non-interest Income
  Provision for Losses
  Non-interest Expenses
   22




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Receivable Portfolio and Asset Quality
    June 30, 2007
    
    December 31, 2006Principal balance of loans receivable
    
    $
    1,100,745
    
    
    $
    956,639Number of loans receivable
    
    
    22,709
    
    
    
    20,300Average loan balance
    
    $
    55
    
    
    $
    47Weighted average loan coupon (1)
    
    
    9.43
    %
    
    
    9.50
    %Weighted average initial term
    
    20 years
    
    20 years
 
 (1)
    
    The weighted average loan coupon includes an imbedded servicing fee rate resulting from the
securitization of the loans that are accounted for as financings.  June 30, 2007
    
    December 31, 2006No. of
    
    Principal
    
    % of
    
    No. of
    
    Principal
    
    % ofDays delinquent
    
    Loans
    
    Balance
    
    Portfolio
    
    Loans
    
    Balance
    
    Portfolio31 60
    
    
    197
    
    
    $
    6,497
    
    
    
    0.6
    %
    
    
    248
    
    
    $
    9,354
    
    
    
    1.0
    %61 90
    
    
    63
    
    
    
    2,318
    
    
    
    0.2
    %
    
    
    86
    
    
    
    3,159
    
    
    
    0.3
    %Greater than 90
    
    
    147
    
    
    
    5,808
    
    
    
    0.5
    %
    
    
    131
    
    
    
    5,416
    
    
    
    0.6
    %
   23




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
     Loan Pool Unpaid Principle Balance (dollars in thousands) (1)
 2002 and2001 and prior
    
    subsequentAt June 30, 2007Dollars
    
    $
    43,542
    
    
    $
    1,065,108Percentage of total
    
    
    3.9
    %
    
    
    96.1
    %At December 31, 2006Dollars
    
    $
    46,612
    
    
    $
    915,329Percentage of total
    
    
    4.8
    %
    
    
    95.2
    %
 Static Pool Performance (dollars in thousands) (1)
 2002 and2001 and prior
    
    subsequentSix Months Ended June 30, 2007Dollars defaulted
    
    $
    1,769
    
    
    $
    7,840Net losses
    
    $
    1,063
    
    
    $
    2,631Six Months Ended June 30, 2006Dollars defaulted
    
    $
    2,926
    
    
    $
    6,663Net losses
    
    $
    2,502
    
    
    $
    3,842
 
 (1)
    
    Includes owned portfolio, repossessed inventory and loans sold with recourse  24




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Liquidity and Capital Resources
      25




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
      26




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  27




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
    Expected Maturity0 to 3
    
    
    4 to 12
    
    
    1 to 5
    
    
    Over 5months
    
    
    months
    
    
    years
    
    
    years
    
    
    TotalAssetsCash and equivalents
    
    $
    1,158
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,158Restricted cash
    
    
    19,168
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,168Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,823
    
    
    
    41,823Loans receivable, net
    
    
    36,564
    
    
    
    106,761
    
    
    
    436,695
    
    
    
    516,441
    
    
    
    1,096,461Servicing advances
    
    
    3,163
    
    
    
    2,670
    
    
    
    
    
    
    
    
    
    
    
    5,833Servicing rights
    
    
    92
    
    
    
    265
    
    
    
    1,018
    
    
    
    948
    
    
    
    2,323Furniture, fixtures and equipment, net
    
    
    264
    
    
    
    824
    
    
    
    2,206
    
    
    
    
    
    
    
    3,294Repossessed houses
    
    
    2,115
    
    
    
    2,114
    
    
    
    
    
    
    
    
    
    
    
    4,229Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,277
    
    
    
    32,277Other assets
    
    
    7,947
    
    
    
    1,947
    
    
    
    2,675
    
    
    
    7,585
    
    
    
    20,154Total assets
    
    $
    70,471
    
    
    $
    114,581
    
    
    $
    442,594
    
    
    $
    599,074
    
    
    $
    1,226,720Liabilities and Stockholders EquityWarehouse financing
    
    $
    36,283
    
    
    $
    108,849
    
    
    $
    
    
    
    $
    
    
    
    $
    145,132Securitization financing
    
    
    33,873
    
    
    
    96,455
    
    
    
    342,161
    
    
    
    344,514
    
    
    
    817,003Repurchase agreements
    
    
    23,269
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,269Notes payable  servicing advances
    
    
    557
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    557Other liabilities
    
    
    23,641
    
    
    
    1,963
    
    
    
    
    
    
    
    1,810
    
    
    
    27,414Total liabilities
    
    
    117,623
    
    
    
    207,267
    
    
    
    342,161
    
    
    
    346,324
    
    
    
    1,013,375Preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    125Common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    259
    
    
    
    259Additional paid-in-capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    220,323
    
    
    
    220,323Accumulated other comprehensive loss
    
    
    172
    
    
    
    546
    
    
    
    2,828
    
    
    
    2,205
    
    
    
    5,751Distributions in excess of earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,113
    )
    
    
    (13,113
    )Total stockholders equity
    
    
    172
    
    
    
    546
    
    
    
    2,828
    
    
    
    209,799
    
    
    
    213,345Total liabilities and stockholders equity
    
    $
    117,795
    
    
    $
    207,813
    
    
    $
    344,989
    
    
    $
    556,123
    
    
    $
    1,226,720Interest sensitivity gap
    

   $
    (47,324
    )

    

    $
    (93,232
    )

   
     $
    97,605
    
    
    $
    42,951Cumulative interest sensitivity gap
    
    $
    (47,324
    )
    
    $
    (140,556
    )
    
    $
    (42,951
    )
    
    
    Cumulative interest sensitivity gap to total assets
    
    
    (3.86
    )%
    
    
    (11.46
    )%
    
    
    (3.50
    )%
    
    
    
 28




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
       Interest Rate SensitivityThere-2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    after
    
    
    TotalInterest sensitive assetsInterest bearing deposits
    
    $
    21,503
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    21,503Average interest rate
    
    
    4.85
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.85
    %Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,823
    
    
    
    41,823Average interest rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9.28
    %
    
    
    9.28
    %Loans receivable, net
    
    
    72,801
    
    
    
    137,809
    
    
    
    123,048
    
    
    
    108,232
    
    
    
    95,021
    
    
    
    559,551
    
    
    
    1,096,461Average interest rate
    
    
    9.43
    %
    
    
    9.43
    %
    
    
    9.43
    %
    
    
    9.43
    %
    
    
    9.43
    %
    
    
    9.43
    %
    
    
    9.43
    %Derivative asset
    
    
    1,002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,240
    
    
    
    4,242Average interest rate
    
    
    5.28
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.28
    %
    
    
    5.28
    %Total interest sensitive assets
    
    $
    95,306
    
    
    $
    137,809
    
    
    $
    123,048
    
    
    $
    108,232
    
    
    $
    95,021
    
    
    $
    604,614
    
    
    $
    1,164,029Interest sensitive liabilitiesWarehouse financing
    
    $
    72,566
    
    
    $
    72,566
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    145,132Average interest rate
    
    
    7.16
    %
    
    
    7.16
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.16
    %Securitization financing
    
    
    67,647
    
    
    
    118,925
    
    
    
    94,569
    
    
    
    83,279
    
    
    
    70,572
    
    
    
    382,010
    
    
    
    817,003Average interest rate
    
    
    5.65
    %
    
    
    5.65
    %
    
    
    5.65
    %
    
    
    5.65
    %
    
    
    5.65
    %
    
    
    5.65
    %
    
    
    5.65
    %Repurchase agreements
    
    
    23,269
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,269Average interest rate
    
    
    6.12
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.12
    %Notes payable  servicing
advances
    
    
    557
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    557Average interest rate
    
    
    14.18
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14.18
    %Derivative liability
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    44Average interest rate
    
    
    5.51
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.51
    %
    
    
    5.51
    %Total interest sensitive
liabilities
    
    $
    164,072
    
    
    $
    191,491
    
    
    $
    94,569
    
    
    $
    83,279
    
    
    $
    70,572
    
    
    $
    382,021
    
    
    $
    986,005
 29




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##### Table of Contents



Item 4. Controls and Procedures
    30




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##### Table of Contents



PART II   OTHER INFORMATION
 
 ITEM 4. Submission of Matters to a Vote of Security Holders
  Nominee
    
    For
    
    WithheldPaul A. Halpern
    
    
    24,450,929
    
    
    
    23,749Ronald A. Klein
    
    
    24,448,581
    
    
    
    26,097Richard H. Rogel
    
    
    22,413,951
    
    
    
    2,060,727Robert S. Sher
    
    
    24,287,379
    
    
    
    187,299Gary A. Shiffman
    
    
    24,285,179
    
    
    
    189,499Michael J. Wechsler
    
    
    24,448,581
    
    
    
    26,097
 
 ITEM 6. Exhibits
  Exhibit No.
    
    Description
    
    Method of Filing31.1
    
    Certification of Chief Executive Officer
Required by Rule 13a-14(a) of the
Securities Exchange Act of 1934, as
amended.
    
    
    (1
    )31.2
    
    Certification of Chief Financial Officer
Required by Rule 13a-14(a) of the
Securities Exchange Act of 1934, as
amended.
    
    
    (1
    )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.
    
    
    (1
    )
 
 (1)
    
    Filed herewith 31




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##### Table of Contents



SIGNATURES
   ORIGEN FINANCIAL, INC.BY:
    /s/ W. Anderson Geater, Jr.W. Anderson Geater, Jr., ChiefFinancial Officer and Secretary
(Duly authorized officer and principal
financial officer) 32




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##### Table of Contents



ORIGEN FINANCIAL, INC.
EXHIBIT INDEX
 Exhibit No.
    
    Description
    
    Method of Filing31.1
    
    Certification of Chief Executive Officer
Required by Rule 13a-14(a) of the
Securities Exchange Act of 1934, as
amended.
    
    
    (1
    )31.2
    
    Certification of Chief Financial Officer
Required by Rule 13a-14(a) of the
Securities Exchange Act of 1934, as
amended.
    
    
    (1
    )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.
    
    
    (1
    )
 
 (1)
    
    Filed herewith. 33