Impac Drops '07 Earnings Guidance

Impac Mortgage Holdings here, a mortgage REIT, said it will not pay a dividend in the second quarter as the company struggles to cope with higher-than-expected losses on real estate-owned.

The company had previously planned to expedite the sale of its REO and in making the dividend decision said it hopes that the acceleration of REO sales via auctions will reduce the loss rate and preserve capital over the long run.

Joseph Tomkinson, Impac's chairman and CEO, said in a news release that the company decided to expedite REO sales in light of increased delinquencies, REO and loan losses.

"Although we are seeing charge-offs at levels higher than we anticipated, we are pleased to have reduced our exposure to future losses by auctioning REOs, especially as real estate values may deteriorate in the near future," Mr. Tomkinson said.

Previously, Impac had paid an annual dividend of $0.40 per share. The company's stock price fell 22% on June 27, the day after the decision not to pay a second-quarter dividend was made. Impac is primarily a nonconforming and alt-A mortgage lender and investor.

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