In response to deterioration in the subprime mortgage market, Impac Mortgage Holdings Inc. (MYSE:IMH) said early Friday that the company has formed Arch Bay Group LLC for the purpose of acquiring, restructuring and remarketing non-performing mortgage loans and real estate property. “With the dramatic increase in the number of mortgage defaults and the pressure warehouse lenders are giving their clients to sell mortgage loans, we believe there is an attractive opportunity to be a buyer of these non-performing loans,” commented Joseph Tomkinson, chairman and CEO. Mr. Shawn Miller and Mr. Steven Davis, co-founders of ArchBay, will lead the organization as president and chief financial officer, respectively.
Miller and Davis have extensive experience with defaulted mortgages, default timeline management and non-performing assets. Both were the founders of 3 Arch Financial Services, which specialized in providing national default services for banks and mortgage servicers. 3 Arch was sold in 2004 to Land America Financial Group, one of the leading national title and information service companies. Impac said the formation of ArchBay was designed to take advantage of third party capital and its own infrastructure to purchase non-performing mortgage loans and employ proprietary modeling and loss mitigation strategies to restructure or refinance non-performing loans. C-BASS, a joint venture between PMI and Radian, is one of the nation’s largest so-called ‘scratch and dent’ mortgage operations, and through its Litton Loan Servicing subsidiary is the nation’s largest issuer of reperforming mortgage securitizations. Scratch and dent loans are those that are repurchased or otherwise bought out of a mortgage pool due to non-compliance with investor terms, including early payment default, and are then made to perform again. These loans are often then resecuritized in Wall Street’s structured finance markets, often within collateralized debt obligations, or CDOs. For more information, visit http://www.impaccompanies.com.