Impac Mortgage CEO: Company's Viability in Question
Impac Mortgage Holdings, a struggling mortgage lender, said on Monday it expects to report a larger third-quarter loss, and its chief executive said the company's viability was a concern.
The Irvine, California-based company delayed filing its quarterly report with securities regulators, saying it needs more time to account for changes including its discontinued warehouse lending operations, commercial operations, and halting of the sale and purchase of non-prime mortgages. It expects to file the report in mid-December.
Impac projected a greater quarterly loss than the $127.7 million it posted a year earlier, but could not estimate the size. It also said the value of liabilities on its books will exceed assets, creating a shareholder deficit.
The company in September quit substantially all mortgage lending, and halted its dividend. The company had specialized in "Alt-A" home loans, which often go to people who don't qualify for prime loans because they cannot fully document income or assets. Impac had made or acquired about $11.6 billion of mortgage loans in 2006.
"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," Chief Executive Joseph Tomkinson said in a statement.
"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.
Tomkinson said Impac's cash flows and falling operating costs, "should provide sufficient liquidity to execute its current business plan."
Dozens of mortgage lenders have quit the industry this year amid rising defaults, falling home prices and investor resistance to buying home loans they now consider too risky.
Among the companies to go bankrupt was American Home Mortgage Investment, another big Alt-A lender.
Impac shares last traded at $1.05. They began the year at $8.80.