UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): June 6 13, 2007

ECC CAPITAL CORPORATION

(Exact Name of Registrant as Specified in Charter)

Maryland

001-32430

84-1642470

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

1733 Alton Parkway,

Irvine, California

92606

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (949) 955-8733

Former name or former address, if changed since last report: N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.

Entry into a Material Definitive Agreement.

~~Office Lease~~Employment Agreement with Larry Moretti

On June 6 13, 2007, the registrant entered into ana ~~office~~new ~~lease~~Employment Agreement (the “Employment Agreement”) with ~~Knobbe,~~Larry ~~Martens~~Moretti, ~~Olsen &~~the ~~Bear,~~registrant’s ~~LLP,~~Executive ~~pursuant~~Vice toPresident ~~which the~~and ~~registrant~~Chief ~~agreed~~Administrative toOfficer. ~~sublease~~The ~~approximately~~new ~~11,000~~Employment ~~square~~Agreement ~~feet~~is ofintended ~~space~~to ~~located~~compensate atMr. ~~2040~~Moretti ~~Main~~in ~~Street,~~accordance ~~Irvine,~~with ~~California,~~his ~~which~~responsibilities ~~will~~and ~~serve~~further asretain his services in connection with the registrant’s ~~principal~~continuing ~~executive~~operations ~~offices.~~after ~~The~~the ~~lease~~sale isof ~~for~~its awholesale ~~term~~mortgage ofoperations 18in ~~months,~~February ~~beginning June 30,~~ 2007. ~~The~~ ~~monthly~~Under ~~lease~~the ~~rate~~terms ~~will~~of beMr. ~~approximately~~Moretti’s ~~$30,760~~prior ~~during~~employment ~~the~~agreement, ~~first~~he 12was ~~months~~paid ofan ~~the~~annual ~~lease~~salary ~~and~~of ~~approximately~~ $31200,~~859~~000 and ~~during~~entitled ~~the remaining six months. Subject~~ to ~~the~~receive ~~right~~severance ~~of the landlord~~benefits, ~~the~~upon ~~registrant~~termination ~~may~~under ~~extend~~certain ~~the lease~~circumstances, ~~for~~of a$500,000, ~~period~~25% of 18which ~~additional~~would ~~months~~be atpaid aupon ~~lease~~termination ~~rate~~and ~~based on~~ the ~~market~~remaining ~~lease~~75% ~~rate~~of ~~for~~which ~~comparable~~would ~~property~~be ~~determined~~paid asmonthly ofover ~~the~~a ~~commencement~~12 ofmonth ~~the extension~~ period.

In order to retain Mr. Moretti’s services for an extended period of time, the registrant and Mr. Moretti agreed to restructure the terms of his employment. The ~~foregoing~~new ~~description~~Employment Agreement provides that Mr. Moretti will still be paid an annual salary of $200,000, but also provides for retention bonuses that, if paid, eliminate the ~~office~~severance ~~lease~~benefits isMr. ~~qualified~~Moretti inwould ~~its~~have ~~entirety~~been byentitled ~~reference~~to receive. The new Employment Agreement provides that, subject to continued employment, Mr. Moretti will receive a lump sum bonus of $400,000 on January 2, 2008 and a lump sum bonus of $100,000 on March 31, 2008. The retention bonuses equal the ~~complete~~amount of ~~text~~severance benefits Mr. Moretti would have received under the terms of his prior employment agreement. In addition, the ~~office~~new ~~lease~~Employment ~~attached~~Agreement ~~hereto~~provides ~~as Exhibit~~that 10Mr.1 ~~and~~Moretti ~~incorporated~~will ~~herein~~receive bycash ~~reference~~compensation of $48,620 payable on January 2, 2008, in lieu of certain benefits under the prior employment agreement.

~~Item~~As 1with Mr.~~02.~~ ~~Termination~~Moretti’s prior employment agreement, his new Employment Agreement provides that he is: (1) eligible to participate in the registrant’s standard employee benefit plans; (2) eligible to receive an automobile allowance not to exceed $2,000 per month; and (3) entitled to accelerated vesting of any unvested stock options or restricted stock, such that all outstanding unvested stock options or restricted stock held by him will vest in 12 equal installments on a ~~Material~~monthly ~~Definitive~~basis ~~Agreement~~following the termination date and will thereafter be exercisable by him for 90 days following the twelve-month vesting period.

~~On June 6,~~Should ~~2007,~~any ~~Performance~~of ~~Credit Corp.,~~ the ~~registrant’s~~foregoing ~~wholly~~payments ~~owned~~or ~~subsidiary,~~other ~~eliminated~~payments ~~its~~made ~~nonqualified~~to ~~deferred compensation plan entitled “The Executive Nonqualified Excess Plan,” covering key managerial employees~~Mr. ~~This~~Moretti ~~plan~~subject ~~allowed~~him ~~for deferral of up~~ to ~~80%~~an ofexcise ~~the~~tax ~~participant’s~~pursuant ~~compensation into the plan. Participants were immediately 100% vested in the compensation deferrals and were able~~ to ~~receive~~Section ~~payments~~4999 ~~from the plan after the completion~~ of ~~five years of service. Due to~~ the ~~significant~~Internal ~~change~~Revenue inCode ~~Performance Credit’s operations after the sale~~ of ~~its~~1986, ~~wholesale~~as ~~mortgage lending operations to Bear Stearns and the reduction in the number of employees~~amended, ~~the~~Mr. ~~nonqualified~~Moretti ~~deferred~~generally ~~compensation~~will ~~plan was~~also nobe ~~longer~~entitled ~~utilized~~to bya ~~employees~~“gross ~~and,~~up” ~~therefore,~~payment ~~management~~equal ~~decided~~ to ~~terminate~~such ~~the~~excise ~~plan~~tax.

The new Employment Agreement supersedes Mr. Moretti’s October 10, 2006 employment agreement with the registrant. The foregoing description of the Employment Agreement is qualified in its entirety by reference to the complete text of the Employment Agreement attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description of Exhibit
10.1		~~Commercial~~Employment ~~Lease,~~Agreement ~~dated as of June 6, 2007,~~ by and between ~~Knobbe, Martens, Olsen & Bear, LLP and~~ ECC Capital Corporation ~~for~~and ~~property~~Larry ~~located at 2040 Main Street, Suite 800, Irvine, California.~~Moretti

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	~~ECC CAPITAL CORPORATION~~	ECC CAPITAL CORPORATION
June 12, 2007	By:	/s/ Roque A. Santi
June 18, 2007		By:	/s/ Roque A. Santi
		~~Roque A. Santi~~	Roque A. Santi
		~~President and Chief Financial Officer~~	President and Chief Financial Officer

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