Opteum Inc. Reports First Quarter 2007 Results.

76.5% of First Quarter Net Loss Attributable To:

$37.4 Million Valuation Allowance on OFS's Deferred Tax Assets

$12.2 Million Negative Fair Value Adjustment to OFS's Mortgage Servicing Rights

$1.3 Million Negative Fair Value Adjustment to OFS's Residuals

$8.8 Million in Asset Write Downs at OFS 

VERO BEACH, Fla. -- Opteum Inc. (NYSE:OPX) ("Opteum" or the "Company"), a real estate investment trust ("REIT"), today reported a consolidated net loss of $78.1 million, or $(3.14) per Class A Common Share for the three month period ended March 31, 2007, compared to a consolidated net loss of $8.0 million, or $(0.34) per Class A Common Share, for the prior year period. The Company's first quarter results were significantly impacted by operations at the Company's majority-owned subsidiary, Opteum Financial Services, LLC ("OFS").

Nearly 50% of the Company's first quarter net loss, or $37.4 million, was attributable to a valuation allowance on OFS's deferred tax assets. Nearly 17.5% of the first quarter net loss was attributable to negative fair value adjustments to OFS's mortgage servicing rights and retained interests in securitizations. Slightly more than 10% of the first quarter net loss was attributable to asset write downs at OFS due in part to the Company's decision to exit the mortgage origination business.

Details of Results of Operations

The Company's first quarter consolidated results include net interest income of $1.9 million, other income of $1.4 million, gross servicing fee income of $7.6 million, a $12.2 million negative fair value adjustment to mortgage servicing rights (inclusive of $4.7 million of run-off), an $18.0 million loss on mortgage banking activities, $0.8 million in losses on the sale of mortgage-backed securities, a $17.8 million provision associated with an increase in the Company's loan loss reserve, $8.8 million in asset write downs at OFS, $20.6 million in operating expenses, an income tax provision of $11.5 million (inclusive of a $37.4 million valuation allowance on deferred tax assets) and $0.8 million of minority interest in OFS's loss.

The Company's $18.0 million first quarter loss on mortgage banking activities includes a $14.1 million negative fair value adjustment to mortgage loans held for sale and interest rate lock commitments, a $1.3 million negative fair value adjustment to retained interests in securitizations and hedging losses of $4.6 million. As of March 31, 2007, the Company's loan loss reserve was $17.9 million, compared with $8.0 million as of December 31, 2006, and $2.2 million as of December 31, 2005.

Management Commentary

During the quarter, the secondary market for mortgage loans, into which OFS sells mortgage loans that it has purchased or originated, experienced significant distress and substantially increased volatility. In response to these developments, the Company previously announced that OFS would exit its Conduit and Wholesale mortgage origination businesses and has entered into a definitive agreement to sell its Retail mortgage origination business. Following the completion of these actions, which collectively resulted in $8.8 million in asset impairments at OFS in the first quarter, OFS will continue to hold residual interests in securitizations and its unsold mortgage servicing rights.

The Company also announced on April 26, 2007, that OFS had entered into a definitive agreement to sell a majority of its private-label and agency mortgage servicing portfolio, the performing loans of which had an aggregate unpaid principal balance of approximately $5.67 billion as of March 31, 2007. The proceeds of this sale will be used to repay debt that is currently secured by OFS's mortgage servicing portfolio.

With these actions, the Company will be able to focus its full energies on managing and growing its portfolio of residential mortgage-backed securities. As of March 31, 2007, the Company's portfolio of mortgage-backed securities consisted of $2.9 billion of Fannie Mae, Freddie Mac and Ginnie Mae agency securities.

Commenting on the Company's first quarter results, Jeffrey J. Zimmer, Chairman, President and Chief Executive Officer, said, "The dramatic deterioration in the secondary market for whole loan mortgage products during the first quarter is largely responsible for the losses at OFS reported today, including the $17.8 million additional loan loss provision and $18 million loss on mortgage banking activities for the quarter. Although we have taken aggressive steps to avoid similar losses in the future, OFS's exit from the mortgage origination business will be a process that will take a quarter or two to complete. Looking forward, we intend to focus our full energies on restoring the profitability of our portfolio of residential mortgage-backed securities that consists entirely of Fannie Mae, Freddie Mac and Ginnie Mae agency securities."

Book Value Per Share

The Company's Book Value Per Share as of March 31, 2007, is $4.80 compared with $7.85 as of December 31, 2006. Book Value Per Share is regularly used as a valuation metric by various equity analysts that follow the Company and may be deemed a non-GAAP financial measure pursuant to Regulation G. The Company computes Book Value Per Share by dividing total stockholders' equity by the total number of shares outstanding of the Company's Class A Common Stock.

REIT Taxable Income 

In order to maintain its qualification as a REIT, the Company is required (among other provisions) to annually distribute dividends to its stockholders in an amount at least equal to, generally, 90% of the Company's REIT taxable income. REIT taxable income is a term that describes the Company's operating results calculated in accordance with rules and regulations promulgated pursuant to the Internal Revenue Code. The Company's REIT taxable income is computed differently from net income as computed in accordance with generally accepted accounting principles ("GAAP net income"), as reported in the Company's consolidated financial statements. Depending on the number and size of the various items or transactions being accounted for differently, the differences between REIT taxable income and GAAP net income can be substantial and each item can affect several reporting periods. Generally, these items are timing or temporary differences between years; for example, an item that may be a deduction for GAAP net income in the current year may not be a deduction for REIT taxable income until a later year.

As a REIT, the Company may be subject to a federal excise tax if it distributes less than 85% of its REIT taxable income by the end of the calendar year. Accordingly, the Company's dividends are based on its REIT taxable income, as determined for federal income tax purposes, as opposed to its net income computed in accordance with GAAP (as reported in the Company's consolidated financial statements).

For the first quarter, the Company estimates its REIT taxable income at $0.7 million. The Company's REIT taxable income includes $3.2 million of interest income on intercompany debt owed by OFS. During April, the Company contributed $88.3 million in capital to OFS by forgiving intercompany debt owed by OFS. As a result, the Company's future REIT taxable income will be lower by the amount of interest that would have otherwise been earned on this intercompany debt.

Opteum will hold a conference call to discuss this press release tomorrow, May 11, 2007, at 8:30 a.m. Eastern time. Investors will have the opportunity to listen to a live Internet broadcast of the conference call through the Company's Web site at www.opteum.com. To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, an Internet replay will be available shortly after the call and continue through May 21, 2007.

About Opteum

Opteum Inc. is a REIT that invests primarily in, but is not limited to, residential mortgage-related securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae). It attempts to earn returns on the spread between the yield on its assets and its costs, including the interest expense on the funds it borrows.

Statements herein relating to matters that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned that such forward-looking statements are based on information available at the time and on management's good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in such forward-looking statements. Important factors that could cause such differences are described in Opteum Inc.'s filings with the Securities and Exchange Commission, including Opteum Inc.'s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q. Opteum Inc. assumes no obligation to update forward-looking statements to reflect subsequent results, changes in assumptions or changes in other factors affecting forward-looking statements.