Item 2.05 Costs Associated with Exit or Disposal Activities

On January 8, 2008, the Audit Committee of the Board of Directors of the Company committed the Company to a workforce reduction pursuant to an exit or disposal plan (the "Plan") as described in paragraph 8 of Financial Accounting Standards Board Statement of Financial Accounting Standards No. 146 Accounting for Costs Associated with Exit or Disposal Activities (SFAS No. 146), under which material charges will be incurred under generally accepted accounting principles applicable to the Company.

The Company is undertaking the Plan in connection with its decision to discontinue its retail and brokerage operations in order to preserve cash and reduce debt and in light of the Company's inability to satisfy certain minimum licensing requirements for these operations relating to the net worth and financial condition of the Company. The Company and its subsidiaries will surrender to appropriate regulatory authorities or otherwise allow to lapse all licenses and other governmental authorizations relating to its mortgage origination and brokerage businesses. Discontinuing such licenses and governmental authorizations may hinder or otherwise negatively affect the ability of the Company to recommence a mortgage origination and mortgage brokerage business if market conditions improve.

The Plan will result in the elimination of approximately 170 positions. The Company expects to have approximately 30 employees, overall, after this reduction in workforce. Subject to completion of the necessary legal notices and requirements, implementation of the Plan will begin immediately and is expected to conclude during the first quarter of 2008.

The Company's mortgage portfolio management operations were not affected by the reduction.

The Company estimates that the total pre-tax charge to earnings associated with the Plan will range between $1.3 million and $1.8 million, consisting primarily of cash expenditures for severance costs. The Company anticipates that substantially all of the pre-tax charges to earnings and cash expenditures will be incurred in the first quarter of 2008; however, some may be incurred in the second quarter of 2008.

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