Impac Forms a New Unit To Manage Problem Credits

Impac Mortgage Holdings here has formed a new subsidiary to acquire, restructure, and remarket nonperforming mortgage loans and real estate property.

Impac CEO Joseph Tomkinson said the unit is being created "in anticipation of deterioration in the mortgage market." The new unit, to be called Arch Bay Group, will be led by Shawn Miller, president, and Steven Davis, chief financial officer. Both were founders of 3 Arch Financial Services, which specialized in providing default services for banks and mortgage servicers.

That firm was sold to Land America Financial Group in 2004.

Mr. Tomkinson said the new unit is designed to take advantage of third-party capital and Impac's infrastructure to purchase nonperforming loans. In addition, he said Impac will employ proprietary modeling and loss mitigation strategies to restructure or refinance nonperforming loans. Loans that cannot be restructured or refinanced will be liquidated, he said.

"With the dramatic increase in the number of mortgage defaults and the pressure warehouse lenders are giving their clients to sell mortgage loans, we believe there is an attractive opportunity to be a buyer of these nonperforming loans," Mr. Tomkinson said.

Impac also said it has created $1.4 billion in two securitizations during the first quarter that are backed by loans totaling $2.4 billion. Of that total, some $2.2 billion of the loans are alt-A home loans and $235 million are commercial and multifamily loans.

"These two securitizations demonstrate the company's ability to attract bond investors despite the unusually volatile mortgage market," Mr. Tomkinson said.

The company also said that its outstanding repurchase requests at the end of the first quarter had been "substantially reduced" from the level at the end of 2006.

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