Impac Mortgage Holdings Inc., Newport Beach, Calif., has announced that it will correct and restate its financial statements for 2001, 2002, and 2003, as well as unaudited statements for the first quarters of 2003 and 2004.The real estate investment trust said the corrections will change its revenue recognition policy regarding the sale of mortgage loans from its subsidiary Impac Funding Corp. to the parent company and the subsequent cash sale of the associated mortgage servicing rights. The mortgage REIT said it has previously recognized the cash gains in the period in which the MSRs were sold and the cash proceeds were received. Its new policy will amortize the gains over the life of the related loans retained by the REIT. "This correction does not constitute a writeoff of previous earnings, but is rather a timing difference, which results in a redistribution of cash gains over the life of the related mortgage loans (generally, on average, 2-3 years)," Impac said. The change affects net earnings under generally accepted accounting principles. The company's estimates of the amount of net earnings that will be redistributed are: $7.3 million for 2001; $14.3 million for 2002; $14.2 million for 2003; $4.3 million for the first quarter of 2003; and $12.1 million for the first quarter of 2004. Impac can be found online at http://www.impaccompanies.com.

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