Impac Mortgage Holdings Inc. has wiped out more than $100 million in debt, erased its equity deficit and started originating mortgages again. The company also earned more than $15 million in loan modification fees last year.
In September 2007, the Irvine, Calif.-based company closed its warehouse, commercial mortgage and other mortgage lending operations. Retail lending subsidiary Pinnacle Financial Corp. — which briefly originated loans as Impac Home Loans — was shut down later that same year.
By the end of 2007, losses at Impac had driven negative shareholder equity to $1.1 billion.
Today, Impac reported 2009 earnings of $11 million, improving from a $45 million loss in 2008. Among its revenues were $18 million in loan modifications fees
The primary source of cash for the company was residual interests in securitizations.
Preferred stock with a carrying value of $106 million was purchased during the year for $1 million, according to the report. Another $29 million in outstanding trust preferred securities was canceled at a cost of just $4 million, while $51 million in trust preferred securities were exchanged for $62 million in junior subordinated notes.
Impac additionally settled a $140 million repurchase line.
As of Dec. 31, 2009, stockholder equity stood at $15 million.
Among several fee-based businesses launched during 2009 were loss mitigation services, real estate disposition services and monitoring and surveillance services.
In addition, Impac said it has begun originating mortgages again.
“The company has established mortgage lending operations as it seeks to re-enter the mortgage lending industry,” the report stated. “The mortgage lending activities include earning fees for brokering loans to third-party lenders since 2008 and originating loans through our mortgage banking platform under the ‘Impac’ brand name.”
While originations were minimal last year, they are expected to increase this year. Production channels include retail, real estate broker and captive production from its own portfolio. Originations are limited to agency programs.