Smaller Players Fill Correspondent Void

Impac Mortgage Holdings Inc. had been grooming mortgage brokers to become correspondent lenders through a program it launched in September 2005.

By 2007, however, the Irvine, Calif.-based company closed its origination operations. That year, around 600 Impac employees were laid off as the nonprime mortgage sector evaporated.

But my March 2010, Impac was back in the game and originating mortgages.

On Friday, Impac announced that it created a new correspondent lending division. Information about the division is online at www.ImpacCorrespondent.com.

Impac said it will provide bulk-bid pricing on new originations and seasoned portfolios, while delivery will be accepted on both a one-time basis and a flow basis.

The unit promises 48-hour file reviews, seven-day fundings and “prompt” review by its due diligence team.

Larry Maitlin and Michael Falce were recruited to build the new division, which will focus on secondary market agency whole-loan transactions.

Falce spent most of his career as a capital markets and sales executive at former Lehman Brothers subsidiary Aurora Loan Services, though he also worked for Countrywide Home Loans.

The majority of Maitlin’s career was as assistant treasurer and as a capital markets executive at Credit-Based Asset Servicing and Securitization LLC, or C-BASS.

“Combining Impac’s Fannie Mae, Freddie Mac and Ginnie Mae seller-servicer approvals with seasoned executives in capital markets, sales and operations, the correspondent lending team provides banks, lenders and credit unions with a source of liquidity and dependability to exit new and seasoned loans on both a bulk and flow basis,” the statement said.

Impac said it is taking advantage of a growing void in correspondent lending.

The likes of Ally Financial Inc., Bank of America Home Loans, MetLife Home Loans and PHH Mortgage Corp. have exited or scaled back their correspondent lending since last year.

Smaller lenders to exit correspondent include Merit Mortgage Services, Sidus Financial LLC, O2Funding and reverse mortgage lender Genworth Financial Home Equity Access.

“Due to today’s challenging economic environment, many institutions are abandoning the correspondent lending market,” Impac said in Friday’s announcement. “Conversely, Impac sees the opportunity to help clients grow their business by providing superior customer service while building trust and loyalty one relationship at a time.”

But Impac faces the competition of many new entrants into the correspondent lending space. Among nearly a dozen firms that have either launched or expanded correspondent lending divisions during the past year are: