Vestin Mortgage real estate trusts narrow losses

Wednesday, Nov. 4, 2009 | 4:45 p.m.

The recession continued to hurt results in the third quarter at two real estate investment trusts run by Vestin Mortgage Inc. of Las Vegas, though both trusts narrowed their losses from year-ago levels.

Vestin Realty Mortgage II Inc. on Wednesday reported a quarterly loss of $17.4 million or $1.27 per share on revenue of $1.3 million vs. a loss in 2008's third quarter of $40.1 million or $2.72 per share on revenue of $3.7 million.

The current quarter included a special gain of $17.6 million.

As of Sept. 30, the trust had 28 loans outstanding totaling $143 million, including 11 nonperforming loans with $79.5 million outstanding.

Another trust, Vestin Realty Mortgage I Inc., reported a loss for the third quarter of $4.7 million, or 71 cents per share, on revenue of $300,000, compared with a loss of $6.4 million or 93 cents on revenue of $400,000 a year earlier.

Of its 21 loans with $36.1 million due, 10 with $24.5 million due were nonperforming, the company said.

"We expect that the weakness in the credit markets and the weakness in lending will continue to have an adverse impact upon our markets for the foreseeable future," the funds said in regulatory filings Tuesday.

"This may result in a further increase in defaults on our loans and we might be required to record additional reserves based on decreases in market values or we may be required to restructure loans," said the Vestin trusts, which generally make loans that are riskier than loans made by commercial banks.