It would appear that Impac Mortgage Holdings, Irvine, Calif., is now back on a steady earnings and origination track – that is, once its legacy business is taken out of the equation.
Late Wednesday the former alt-A giant reported a third quarter company wide loss of $2.27 million after being dragged down by a $9 million hit tied to discontinued operations. “This loss was primarily due to the Company taking a charge of $6.1 million during the third quarter of this year, as a result of its intentions to settle two of its remaining legacy lawsuits,” the firm said.
Still, its “continuing” mortgage business earned $4.4 million. The firm saw originations spike by 33% over the second quarter to almost $710 million.
The entire company earned $4.2 million in the second quarter of 2012.
So far this year, the publicly traded nonbank has originated $1.6 billion of residential mortgages. Its servicing portfolio increased to $1.7 billion during the third quarter, from $1.1 billion in 2Q.
Moreover, it is tapping its warehouse lenders for additional lines, the company announced.
Joseph Tomkinson, chairman and CEO of Impac, said in a press statement mortgage banking “will continue to be the main drivers” of its earnings. “In fact, origination volumes have grown quarter over quarter to new record levels since our re-emergence in the mortgage lending business. Although it has taken over four years, through our hard work and persistence the Company and our employees are finally seeing the fruits of our labor.”
During the housing bust Impac ceased funding and was delisted from the stock exchange but has slowly
The company said: “Given our significant lending and securitization volumes completed by the previously discontinued mortgage lending operations in years prior to 2008, we, like others, have been sued, sometimes alongside dozens of other co-defendants. We have diligently defended each, sometimes at considerable expense, because, we believed that the Company ultimately had, in most cases, much less exposure, if any, from these claims, and had hoped to end them in a manner where we could preserve as much shareholder value as possible.”
Impac believes it is in the best interest of its shareholders to settle the lawsuits “rather than be faced with the uncertainty of any court rulings, the exorbitant cost in terms of legal fees, the time involved and the distractions these suits create in defending them.”
