You know things are bad when investors are simply happy not to see a company's plight get any worse. Those who have hung on to Doral (NYSE:DRL) throughout all its trials and tribulations know what "ugly" really looks like.

But this Puerto Rican mortgage lender continues to claw its way back toward respectability, and yesterday's announcement of a new CEO is another step in that direction. The company announced that Glen Wakeman would become the president and chief operating officer of the company immediately, and would assume the title of CEO once Doral's 2005 annual report was filed.

Mr. Wakeman's credentials are far from modest. He has spent the past 20 years at General Electric (NYSE:GE), most recently heading up the company's Latin American consumer finance business. Couple that with chairman and soon-to-be ex-CEO John Ward's experience at American Express (NYSE:AXP) and Chase Manhattan, and I think you can safely say that the professional credentials of Doral's management have been meaningfully upgraded.

Don't expect a quick turnaround, though. Earnings were down about 35% for the first nine months of 2005, and the company expects significantly lower fourth-quarter earnings as well. What's more, loan production in the first quarter of 2006 dropped quite a bit -- from about $1.3 billion in 2005 to less than $900 million. Though some of its trouble is because of confusion and timidity regarding how to account for loan sale transactions, Doral may also suffer from the apparent cooling of the once-hot Puerto Rican mortgage market.

I do have to admit some concern about how the Puerto Rican economy will play into Doral's recovery. A recent piece about Puerto Rico in The Economist was far from encouraging, and banks that live by mortgage booms often struggle in the wake of the inevitable slowdowns.

All the same, this stock may have been battered down far enough to create a long-term profit opportunity. And since the company is still making the payments on its preferred shares, those might also be worth a look.

Just don't fall into the trap of expecting this to be easy or comfortable. The folks running Doral were handed one heck of a mess, and it'll take time to get the company back to a steady state, let alone resumed growth. But given these folks' credentials and Doral's continued market position, this turnaround opportunity is worth a closer look.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).