840889--3/20/2009--DORAL_FINANCIAL

related topics

{loan, real, estate}

{loss, insurance, financial}

{condition, economic, financial}

{financial, litigation, operation}

{competitive, industry, competition}

{regulation, change, law}

{capital, credit, financial}

{personnel, key, retain}

{regulation, government, change}

Current levels of market volatility are unprecedented. The soundness of other financial institutions could affect us. A loss may have to be accrued by Doral Financial with respect to a pending Lehman Brothers, Inc. claim. Difficult market conditions have already affected our industry and may adversely affect us. We have experienced declines in the market value of some of our assets. Doral Financial s business is concentrated in Puerto Rico and continued weakness of P.R. economy may continue to adversely affect Doral Financial. Deteriorating credit quality particularly in real estate loans has adversely impacted Doral Financial and may continue to adversely impact Doral Financial. Changes in interest rates could affect Doral Financial s income and cash flows The hedging transactions that the Company enters into may not be effective in managing the exposure to interest rate risk. Our risk management policies and procedures may leave us exposed to unidentified or unanticipated risk, which could negatively affect us. The preparation of Doral Financial s financial statements requires the use of estimates that may vary from actual results. Defective and repurchased loans may harm Doral Financial s business and financial condition. Doral Financial is exposed to credit risk from mortgage loans held pending sale and mortgage loans that have been sold subject to recourse arrangements. Doral Financial is subject to risks in servicing loans for others. Unforeseen disruptions in the brokered deposits market could compromise Doral Financial s liquidity position. Adverse credit market conditions may affect Doral Financial s ability to meet its liquidity needs. Doral Financial may fail to retain and attract key employees and management personnel. Competition with other financial institutions could adversely affect the profitability of Doral Financial Doral Financial operates within a highly regulated industry and its business and results are significantly affected by the regulations to which it is subject; Changes in statutes and regulations could adversely affect Doral Financial. Damage to Doral Financial s reputation could damage Doral Financial s businesses. Doral Financial and its banking subsidiaries are subject to the supervision and regulation of various banking regulators and have entered into consent orders with these regulators, and these regulators could take action against the Company or its banking subsidiaries. Changes in accounting standards issued by the Financial Accounting Standards Board or other standard-setting bodies may adversely affect Doral Financial s financial statements. Risk relating to Legacy Issues Doral Financial has been the subject of an investigation by the U.S. Attorney s Office for the Southern District of New York, which could require it to pay substantial fines or penalties.

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840889--3/20/2009--DORAL_FINANCIAL_CORP