3-30-02

   The first quarter of 2002 proved two things. First, we skirted a technical recession. Secondly the resilience of the American Consumer was proven. With the economy showing strength and consumer confidence rising quickly, I believe that despite what some economists think, we are not in jeopardy of a double dip. We will continue to recover but it will not be a strong bounce back. Greenspan shouldn't raise interest rates too quickly. He is supposedly worried about inflation, which shows no signs of heating up at this point.

   DenSco raised more money in the first quarter. We stand at 2.25 million in investor money, with properties valued at 3.7 million. The spring is normally the busiest time of year. We have 50% of the portfolio closing in the next 45 days. At the same time, the demand for new loans is just as strong.

   At the end of the quarter we have now financed 53 loans for a total of 4.7 million in properties. Loan life has continued to grow to 87 days and will probably settle around 90-100. Our average loan is up to $75,000. We have one land deal, four construction loans, two of which will close this next month. The rest are foreclosure loans. Our loan to value is staying around a comfortable 61%.

   I am working on raising more money and hoping that we'll have over 3 million by the end of the quarter. I think with the economy stabilizing we will be able to attract more investors.

   Denny J. Chittick