Impac Delays Third Quarter Filing, Expects Greater Loss

November 19, 2007 No Comments »

Irvine, California-based Impac Mortgage Holdings said today that its third quarter earnings report would be delayed, and though it couldn’t provide a “reasonable” estimate, expected a greater loss than a year ago.

The mortgage lender, which expects to file the delayed third-quarter report in mid-December, announced a quarterly loss of $127.7 million in the same period a year ago.

“Although we are disappointed in our inability to file within the deadline, we are pleased to announce that the Company had reduced its outstanding warehouse lines balances to approximately $354.0 million as of November 15, 2007, from approximately $925.0 million at September 30, 2007,” CEO Joseph R. Tomkinson said in a statement.

Despite the reduction of warehouse facilities, the company warned that the value of liabilities on its books will exceed assets, creating a shareholder deficit.

“We are truly disheartened by the chain of events that, despite our arduous efforts, has led to the significant and abrupt loss of our stockholders equity,” Tomkinson added.

Impac, which faces margin calls from Bear Stearns, also expects to substantially add to its loan loss provisions as a result of increased delinquencies in its long term investment portfolio and greater losses tied to the sale and liquidation of real estate owned (“REO”) properties.

In September, Impac halted nearly all of its mortgage lending, including non-prime loan origination (Alt-A, subprime), commercial and warehouse lending operations, though “selected retail originations” are still being pursued.

The question remains whether the lender can weather the storm and stay in business as the mortgage crisis barrels on.

“As we continue to manage through this unprecedented real estate and mortgage business environment, which historically has never seen this magnitude of losses or lack of liquidity in the capital markets, we will do what is necessary to maintain the viability of the company,” he added.

Shares of Impac were down 8 cents, or 10.53%, to 68 cents a share, well below their 52-week high of $9.85.

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