Downey Financial Corp. (NYSE: DSL) shares are declining after the mortgage lender said before the opening that it’s reclassified $99 million in loans as non-performing due to accounting changes.

“We initially did not consider these modifications of performing loans to be troubled debt restructurings, as the modification was only made to those borrowers who were current with their loan payments and the new interest rate was no less than those offered to new borrowers,” Rick McGill, Downey’s president, said in a statement.

The Newport Beach, Calif.-based firm said it initiated a borrower retention program allowing borrowers to change to less expensive financing options. The interest rates of these less expensive options were below the interest rates on the original loans. After a review of the retention program plan, Downey’s auditors reclassified the loans as non-performing.

Downey did not reveal whether the reclassification impacted the company’s financial results.
 
"Unlike other loans classified as non-performing assets, these loans are effectively performing at interest rates no less than those afforded to new borrowers," CFO Brian Cote said in a statement.

In morning trading, DSL shares are down 8.83%, or $2.48, at $25.60. Over the last 52 weeks, shares have ranged from $23 to $74.85.