Impac Mortgage Holdings Fires 47% Of Its Employees After Posting $13 Million Loss In 3rd Quarter Of 2022
Impac Mortgage Holdings had a $13 million loss in the third quarter of 2022. This is leading leadership to adopt a defensive posture. They need to try and navigate one of the most challenging markets in decades. So, they slashed 47% of it’s workforce.
Executives at Impac Mortgage Holdings have also opted to pull back on non-QM products.
Impac Mortgage Holdings CEO George Mangiaracina told the media:
Interest rate and credit spread pressures with attendant market volatility and illiquidity were unrelenting in the third quarter of 2022. The company adopted a defensive risk-off posture in the fourth quarter of 2021. It remains measured and disciplined in its origination and capital markets activities.
3rd quarter losses are down slightly from the$13.5 million loss in the second quarter of 2022. However, the losses are much worse compared to the $2 million profit in the third quarter of 2021.
Impac said that surging interest rates caused it to take a major hit in profitability.
Mortgage originations declined from $682.6 million in the 3rd quarter of 2021 to $128.1 million in the 2nd quarter of 2022. They continued to slide to $62 million in the 3rd quarter of 2022. Meanwhile, non-QM originations fell to $49.6 million in Q3 2022. This is down from $80.2 million in the 2nd quarter of 2022 and $186.2 million in Q3 2021.
Lower originations brought layoffs. As a result, expenses came in at $11 million in the third quarter of 2022. This is down from $14.6 million in the previous quarter. It is also down $19.7 million from the same period of 2021.
Impac Mortgage Holdings’ servicing business also took a hit. Impac’s portfolio was at $69.6 million on June 30, 2022. This is compared to $71.8 million on December 31, 2021 and $65.1 million on September 30, 2021. Impac also continues to sell whole loans and selectively retain Ginnie Mae’s mortgage servicing.