Impac Mortgage Holdings earned $3.1 million in the third quarter thanks to gains from the sale of a title insurance affiliate and fees garnered from mortgage and real estate services, which offset legacy costs and charges.
In the same quarter a year ago the firm earned $974,000.
The firm sold its interest in Experience 1, a title insurance parent company, for $3.7 million, netting $1.78 million on the deal.
Mortgage and real estate services fees rose to $17.9 million compared to $15.5 million during the comparable 2010 period. However, startup and operational costs associated with its expanding production unit have led to negative 2011 profit margins for the company's lending operations.
In the third quarter, Impac's cash within its continuing operations decreased to $8.7 million from $11.5 million. This occurred because fees from the company's mortgage and services units were offset by expenses from operations, and costs associated with buybacks tied to a discontinued nonconforming unit.
The company said the profitability of current operations is set to improve in the future. Among plans for strategic growth in the mortgage area is a correspondent channel with a focus on producing government loans for Ginnie Mae transactions and web-based technology aimed at helping produce more leads for mortgages and RE services, said company CEO Joseph Tomkinson during an earnings conference call Tuesday.
He said the mortgage leads would be focused more on purchase transactions than refinancings. Impac also plans to start offering renovation purchase loans through the government's 203(k) program and jumbo products it will sell to banks and private investors, Tomkinson said.
