Impac Stops Alt-A Lending, Cuts Jobs

September 18, 2007 No Comments »

Impac announced this morning that it has cut nearly all lending, including Alt-A, while firing 144 workers amid continued market tumult.

Along with the halt in Alt-A lending, its main line of business, the lender also announced it would quit warehouse and commercial lending.

“It is with deep sadness and regret that we are currently exiting the Alt-A mortgage business which we pioneered in the early 1990s,” Chief Executive Joseph Tomkinson said.

The CEO also noted that it was “extremely difficult” to sell mortgages on the secondary mortgage market, which many feel is completely dysfunctional at the moment.

“Unfortunately, given the severe dislocation of the market place, which included unprecedented margin calls, we are left with no other alternative but to downsize our company to better operate and navigate through this difficult and unrelenting environment,” he added.

The Irvine, CA-based mortgage lender also mentioned that it would be unlikely to pay its 10 cent dividend for the remainder of the year, due to larger than expected third-quarter losses.

Impac failed to pay its second quarter dividend as well.

Shares of Impac traded down 20 cents, or 11.36% on the news, falling to $1.56, slightly above their 52-week low of $.95.

The news doesn’t come as a huge surprise, as the company had announced a halt in Alt-A lending and 350 associated layoffs roughly a month ago.

See the latest mortgage layoffs, mergers, closures, and rumors.

Leave A Response