Impac Plans to Sell Retail Lending Branches

IRVINE, CA-Impac Mortgage Holdings Inc. has announced a strategic transaction to sell its active “brick and mortar” retail lending branches and centralize its lending operations. The move is expected to improve the profitability of the firm's lending segment, streamline the mortgage operations and better position the company for profitability and growth in 2014.

According to Joe Tomkinson, chairman and CEO of Impac, the move is being made in light of the significant regulatory and compliance changes that are occurring in January 2014, which are expected to add significant complexities to the already challenging mortgage market. As part of this transaction, Impac will be eliminating 23 retail branch locations and a fulfillment center and reducing its current headcount by approximately 180 employees, which it anticipates will result in monthly net savings of approximately $700,000.

“One of the things I am proud of is our management team's ability to be forward-thinking, innovative and nimble, especially in a challenging mortgage market like we are currently experiencing,” says Tomkinson. The firm will be focusing on the lending channels and mortgage products it believes will better contribute to overall long-term lending profitability.

Consolidating its retail lending channel will allow the firm to have better control, be more efficient and provide its customers better customer service. Impac will also aim to expand its retail originations more profitably through a retail call-center approach at its local headquarters. Despite centralizing its retail-origination channel, the company will continue to operate through all three nationwide channels, including retail, wholesale and correspondent, believing that the more centralized operational focus will create more synergies and scalable opportunities for its mortgage operations.

“With these steps, we believe the company will be more competitive in the current challenging mortgage market and better positioned to take advantage of opportunities as they arise,” says Tomkinson.

As GlobeSt.com reported in May, Impac entered into a note purchase agreement issuing $20 million in original aggregate principal amount of convertible promissory notes due 2018. The notes mature on or before April 30, 2018 and accrue interest at a rate of 7.5% per annum, to be paid quarterly.