In a sign of how difficult the mortgage market has become, Impac Mortgage Holdings Inc. said today that it will exit "substantially all" of its lending activities, including warehouse and commercial lending. An additional 114 employees will lose their jobs, the company said, adding to the 350 jobs eliminated on August 22. From the press statement:
Mr. Joseph R. Tomkinson, Chairman and Chief Executive Officer of Impac Mortgage Holdings, Inc. commented, "It is with deep sadness and regret that we are currently exiting the Alt-A mortgage business which we pioneered in the early 1990's ..." "Unfortunately, given the severe dislocation of the market place, which included unprecedented margins calls, we are left with no other alternative, but to down size our Company to better operate and navigate through this difficult and unrelenting environment. As a smaller organization, we will concentrate on maximizing the income and cash proceeds from our long-term investment operations, continue to service our past mortgage customers through our master servicing operation, and make selective strategic investments in companies like our investment in Arch Bay, LLC, an acquirer of non-performing mortgage assets."
Tomkinson said that "my 25 years in this business [I] have never seen anything comparable to [this] scale and magnitude," alluding to the credit crunch that has forced hundreds of lending operations to close or file for bankruptcy protection. Impac said that it has been "extremely difficult" for the mortage lender to find buyers for its currently held-for-sale loans, and said it is "working with its warehouse lenders to determine the most effective method to sell these remaining loans." (Can you say write-downs?) Impac also said it will cancel all common stock dividends, although Tomkinson said that Impac does currently expect to pay its third quarter series B and C preferred stock dividend. My best all those affected by today's cuts at Impac.