Impac Mortgage Holdings Inc. is selling its retail branch network to an undisclosed purchaser because of the added cost of compliance with the regulations coming in January.
The move is separate from its previously announced sale of the AmeriHome platform which it made earlier this month.
Operating a retail brick-and-mortar branch network would not be profitable for Impac under the new compliance scheme because of the additional costs. It will remain in retail but conduct business through a call center in its Irvine, Calif., headquarters, a spokesman said.
The company will be transitioning 23 branch offices and a fulfillment center in the Pacific Northwest to the buyer. As a result it will drop 170 employees, which in turn should lead to monthly net savings of $700,000.
Besides the centralized retail operation, Impac will continue to operate its wholesale and correspondent business lines as well.
When it had been originating loans during the heyday of the subprime business, Impac had a centralized platform, the spokesman pointed out.
Approximately 37% of Impac’s $576 million third-quarter loan production was from correspondent, up from 19% one year prior, while wholesale fell to 34% from 52% in the same time frame. The retail share remained at 29%.
The company’s 4Q13 volumes are expected to be in line with the third quarter ones. But going forward in 2014, management believes the company will be able to grow without being held back by the retail brick and mortar. It will also be able to see lower costs to originate and higher gain-on-sale margins, making its operations more profitable and efficient, the spokesman said.