Impac Mortgage Holdings will sell up to $600 million of non-qualified mortgage loans to Starwood Property Trust over the next 12 months that will be securitized.

Starwood is already working on a deal that will consist only of non-QM loans originated by Impac. Impac expects to co-invest in the issuance and it anticipates participating in future Starwood securitization.

"We are excited to formalize our partnership with Impac, which we believe will help scale our opportunity to provide non-QM loans to high-quality borrowers while sourcing investments that will continue to deliver strong risk-adjusted returns for Starwood shareholders," Steven Ujvary, senior vice president of Starwood Capital Corp., said in a press release.

Non-QM expansion

"Impac is a proven market leader in the non-QM space and we have collaborated on the acquisition of approximately $900 million of Impac-originated non-QM loans. We look forward to continuing to work together to deploy capital into the underserved residential mortgage market."

In April 2017, Impac raised $56 million in new capital in a stock sale to support the securitization of its non-QM production. Then in its third-quarter 2017 results, the company said it was preparing for a non-QM securitization at some point this year.

Of the $1.3 billion of total volume Impac originated in the first quarter, over $248 million was non-QM. Over three-quarters of those were through the wholesale and correspondent channels.

"After having collaborated in the non-QM space for several years, we are excited to formalize our existing Starwood relationship," said George Mangiaracina, the president of Impac. "This arrangement will further Impac's competitive advantage in the nonagency segment of the residential mortgage market and permit the company to participate in the longer-term economics of the loans we originate."