Impac Mortgage Holdings (IMH)

[dpsimswm]

Here's some analysis...

Impac's stock is sitting at 25 cents partly because they are going through a restructuring that took years to bring to fruition and is largely misunderstood by investors. Just prior to the restructuring, the company pulled back big time on loan production.

Here's a note on the 2nd Q results from Housing Wire.

Impac’s originations declined from $622.5 million in the second quarter of 2021 to $482 million in the first quarter of 2022 and $128 million in the second quarter of 2022. Gain-on-sale margins decreased from 175 basis points from April to June 2021 to 14 bps in the same period this year.

Meanwhile, non-QM originations fell to $80.2 million in Q2 2022, down from $314.3 million in Q1 2022 and $100.6 million in Q2 2021.

“In the second quarter of 2021, we began to increase our marketing expenditures in an effort to more directly target non-QM production in the retail channel, expand production outside of California and maintain our lead volume as competition increased,” the company said.

Impac added, “As a result of the recent dislocation within the nonQM market on account of the significant increase in interest rates, in the second quarter of 2022, we reduced our marketing spend as we pulled back on our origination volumes to mitigate the aforementioned risks associated with the current environment.”

https://www.housingwire.com/articles/impac-mortgage-holdings-backs-off-non-qm-posts-ugly-q2-results/

According to the other article mentioned in the post before this, the firms that actually made NonQM loans in the past couple of quarters are sitting on billions of dollars in NonQM backlogs that are paying below market rates. That's not surprising given the speed of rate hikes during this cycle.



Impac not making NonQM loans in 2nd Q and possibly 3rd Q could be a blessing.