Feb. 28 (Bloomberg) -- Shares of Fremont General Corp. hit a three-year low as the third-largest provider of subprime U.S. mortgages through brokers postponed filing its earnings for the fourth quarter and 2006. The stock fell as much as 20 percent.

Fremont General also will delay its earnings conference call, the Santa Monica, California-based company said in a statement. The statement didn't give a reason for the delay, and Linda Bandov, spokeswoman for the company, declined to comment.

``When I heard the news, I gulped,'' said Theodore Kovaleff, an analyst with New York-based Sky Capital LLC who also owns the stock. ``There's definitely a worry that they may have had difficulties in selling packages'' of loans to investors.

Fremont General shares fell $1.44, or 12 percent, to $10.21 as of 11:29 a.m. in New York Stock Exchange composite trading, after touching $9.35. It was the first time the stock traded at less than $10 since 2003. The stock has fallen 51 percent in the last year before today.

Fremont General plans to file an explanation of the delay with the U.S. Securities and Exchange Commission by the end of the week, Bandov said.

The company wrote $25.8 billion in residential loans in the first three quarters of 2006, compared with $26.6 billion a year earlier. California accounted for more than a quarter of the loans last year, followed by Florida at 14 percent and New York at 12 percent, although the company makes residential loans in 47 states.

Problems for Subprimes

A slumping housing market and lending that allowed buyers to borrow a down payment or provide little proof of their ability to pay are contributing to the most serious problems for new subprime loans in at least six years.

Subprime mortgages, given to people with limited credit records or high debt burdens, accounted for a fifth of all new home loans last year. Delinquencies and defaults rose 1.46 percentage points last month on the ABX-HE-BBB-07-1 index, created twice a year by securities firms including Deutsche Bank AG and Goldman Sachs Group Inc.

New Century Financial Corp. and HSBC Holdings Plc, the world's third-largest bank, earlier this month said losses from their subprime mortgages are rising faster than they anticipated. McLean, Virginia-based Freddie Mac, the second-largest provider of funds for U.S. home loans, said yesterday it will require lenders to assess a borrower's ability to make payments on adjustable-rate mortgages once initial ``teaser'' rates rise.

Restrictions on Loans

Fremont Investment & Loan, the company's main operating unit, tightened its guidelines at least twice in the past year to lower the number of late payments. The company said last month it will stop giving mortgages to people who can't prove their income when buying a home with no money down, or to those who make down payments of less than 10 percent for properties sold without real estate agents. It will also refuse to refinance loans that are more than 90 days late.

Previous changes cut the number of first-time homebuyers in its new loan mix to 5.6 percent in September, from 24 percent in June.

To contact the reporter on this story: Courtney Dentch in New York at cdentch1@bloomberg.net.

Last Updated: February 28, 2007 11:34 EST