83402--12/14/2007--RESOURCE_AMERICA

related topics

{investment, property, distribution}

{loan, real, estate}

{tax, income, asset}

{debt, indebtedness, cash}

{competitive, industry, competition}

{acquisition, growth, future}

{personnel, key, retain}

{operation, international, foreign}

{stock, price, share}

{interest, director, officer}

{condition, economic, financial}

Risks Related to Our Business Generally Our business depends upon our ability to sponsor and raise investor capital for our investment funds. Interest rate changes may reduce the value of our assets, our returns on these assets and our ability to generate and increase our management fee revenues. Increases in interest rates will increase our operating costs. Changes in interest rates may impair the operating results of our investment funds and thereby impair our operating results. Declines in the market values of our investments may reduce periodic reported results, credit availability and our ability to make distributions. If we cannot generate sufficient cash to fund our participations in our investment funds, our ability to maintain and increase our revenues may be impaired. Termination of management arrangements with one or more of our investment funds could harm our business. We may have difficulty managing our growth which may divert resources and limit our ability to expand our operations successfully. Our business will be harmed if we are unable to locate and retain key personnel. We are subject to substantial competition in all aspects of our business. There are few economic barriers to entry in the asset management business. Risks Relating to Particular Aspects of Our Financial Fund Management, Real Estate and Commercial Finance Operations As a result of recent conditions in the global capital markets, our ability to sponsor investment vehicles and increase our assets under management may be limited in our financial fund management subsidiary. As a result of recent conditions in the global capital markets, our ability to sponsor investment vehicles and increase our assets under management may be limited in our financial fund management subsidiary. We sometimes retain some portion or possibly all of the equity in the CDOs we sponsor. CDO equity receives distributions from the CDO only if the CDO generates enough income to first pay the holders of the debt securities and expenses. We sometimes retain some portion or possibly all of the equity in the CDOs we sponsor. CDO equity receives distributions from the CDO only if the CDO generates enough income to first pay the holders of the debt securities and expenses. We arrange for warehouse and other short term financing for assets we accumulate for the account of investment vehicles we sponsor. We may guarantee and, with respect to specified asset classes we have guaranteed some portion of amounts drawn on these facilities which exposes us to loss. In some of our investment funds, a portion of our management fees may depend upon the performance of the fund and, as a result, our management fee income may be volatile. Our income from our interests in the Trapeza CDO program may be volatile. Real estate loans in our portfolio are subject to higher risk of default than conventional mortgage loans. Real estate loans in our portfolio require large lump sum payments at maturity, increasing the risk of default. The value of our portfolio of real estate loans and property interests depends upon the value of the underlying real properties which may decline due to factors beyond our control. Our portfolio of real estate loans principally consists of junior mortgage loans, which are subject to higher default risks than senior financing. Our real estate loan loss reserve may not be sufficient to cover future losses. Our real estate loans are illiquid, and we may not be able to divest them in response to changing economic, financial and investment conditions. Hazardous or toxic substances on properties underlying our loans may subject us to environmental liabilities. Our equipment leases and commercial notes may have greater risks of default than senior secured loans.

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83402--12/14/2007--RESOURCE_AMERICA_INC