Impac Mortgage Holdings Inc. has suspended new Alt-A business but will continue to fund conforming loans.
“In light of the continued and widely publicized volatility in the secondary and securitization markets, we have suspended funding on loans previously referred to as Alt-A loans,” the Irvine, Calif.-based company said in an announcement today.
Impac indicated it has significantly reduced expenses over the past 90 days and made all margin calls to date. In addition, the company said it has negotiated the sale of about $1 billion out of $1.6 billion in warehoused loans. The loan sales are expected to be completed within 30 days — although they are generating a positive net interest spread during the holding period.
“We would like to remind our stockholders that these rapid changes are widespread in our industry and while we are continuing to assess the market daily and cannot make any assurances, we believe that we are taking the right steps to preserve long term stockholder value,” Impac Chairman and CEO Joseph R. Tomkinson said in the statement.
The real estate investment trust, which “invests primarily in non-conforming Alt-A mortgage loans,” said it will continue to fund retail and broker loans that can be sold to Fannie Mae or Freddie Mac — though such a major transition may be difficult to successfully execute.
