MORTGAGE LENDER WILL SLIM DEBTS.

Byline: Enrique Rivero Daily News Staff Writer

With the threat of stock market delisting hanging over its head and a recent default on a loan, Woodland Hills mortgage lender PacificAmerica Money Center Inc. announced Thursday it has taken a number of steps to get its financial house in order.

The company said it recently completed the sale of $104 million in loans to four unnamed institutional purchasers, is restructuring its debt and is taking other steps to improve its liquidity and meet trading requirements to stay on the Nasdaq.

The company blamed the weak subprime mortgage loan market for its woes.

``We're taking steps to improve the position of the company,'' Executive Vice President Richard B. Fremed said in a telephone interview. ``We're progressing to meet all our required obligations.''

The company said management decided to sell a ``substantial amount of loans before the end of 1998 in order to increase liquidity, pay off the remaining balance owed on the company's warehouse line of credit and reduce the company's loan inventory.''

As a result of the loan sale, the company paid off the $46 million balance on a warehouse line of credit.

In October and November, the company sold an additional $60 million in loans through a prior agreement with Advanta, bringing its total amount of loans sold in the quarter to $164 million.

The company now holds about $60 million in loans it also wants to sell off.

Meanwhile, the mortgage lender has defaulted on a $5.1 million payment due to an unnamed lender, which PacificAmerica says at this point is requiring only payments on the interest-only strips receivable securing the financing.

PacificAmerica has proposed a repayment schedule that would pay off the debt by March 2001 and would let it keep a portion of the cash flow from those strips during the payment period.

Also, problems linked with the subprime market led the Federal Deposit Insurance Corp. and the California Department of Financial Institutions to take steps that prompted subsidiary Pacific Thrift and Loan to stop selling loans for securitization, file a revised capital plan and take other actions to keep regulators at bay.

The company's stock has had a rocky year, during which it traded at a high of $25 on March 6 but ended the year at 43.75 cents, its lowest point.

The company also reported Thursday that Nasdaq said on Dec. 24 it would delist PacificAmerica from its national market on Feb. 26 if its common stock does not maintain a market value of at least $5 million for the 10 days prior to Feb. 24, and on March 29 if its stock price doesn't maintain a minimum $1 per share for the 10 days prior to March 26.

``Management is currently uncertain whether it will achieve either of these standards as required to avoid a delisting of its common stock from trading on the Nasdaq national market,'' the company said.

If delisted, the company's stock would trade on the over-the-counter market, which would reduce the ability of stockholders to trade PacificAmerica stock.

The weak subprime market forced PacificAmerica in October to discontinue its wholesale loan division and led its proposed sale to Santa Monica-based Fremont General Corp. to fall apart.