California-based Impac Mortgage Holdings is repositioning itself as a mortgage brokerage and voluntarily giving up its seller-servicer designation with Fannie Mae and Freddie Mac.
“Non-transitory inflation and Federal Reserve tightening, coupled with widening credit score spreads, has decreased the addressable marketplace for our product choices,” George Mangiaracina, chairman and CEO, stated in an announcement.
“Regardless of competitor consolidation and closures, extra business origination capability stays, evidenced by contributors pricing to lower web margins in pursuit of market share. The Firm has no intention of participating in systematic, non-economic actions,” Mangiaracina added.
Impac is transitioning its retail client direct lending division right into a mortgage dealer achievement mannequin to supply varied merchandise at a decreased price per mortgage. Non-qualified mortgages will proceed to be the dominant product within the dealer channel, the corporate stated.
The corporate stated the decreased price per mortgage will come from, amongst different issues, the decreased want for specialised staffing and operations. For instance, Impac decreased its workplace house from 120,000 sq. toes to 19,000 sq. toes and negotiated a buy-out of its legacy industrial lease for $3 million.
Like a few of its friends, Impac has additionally determined to wind down operations throughout the third-party origination (TPO), which has skilled quantity and margin deterioration. Impac will proceed to honor its pipeline via the correspondent channel.
Impac, whose inventory is beneath risk of being de-listed on the New York Inventory Change, expects to be a third-party originator to assist its dealer mannequin as wanted.
The corporate has additionally voluntarily relinquished its government-sponsored enterprise vendor/servicer designation as a result of lack of typical GSE origination quantity and servicing rights over the previous a number of years.
“The Firm has no visibility as to when these dislocations will abate and return the business to normalized volumes and margins,” Mangiaracina stated. “The steps the Firm outlines on this enterprise replace proceed the theme of eliminating complexity and lowering prices from the Firm’s company and working verticals, allowing the Firm to give attention to complementary strategic ventures, adjoining income alternatives and attendant capital elevate and company finance actions.”
Impac reported a $13 million loss within the third quarter of 2022, down barely from the $13.5 million loss within the second quarter of 2022, regardless of a defensive posture of its govt staff by pulling again on non-QM merchandise and trimming the workforce.
