Is Impac Mortgage Insolvent?

Silence is not golden for Impac Mortgage (IMH).

After the bell on Tuesday, Impac belatedly revealed that it had received a September default notice from Bear Stearns related to unmet margin calls on an active repurchase agreement. Bear Stearns then notified Impac that it had elected to terminate the facility and demanded immediate payment of the entire amount ($286 million) and seized the collateral.

Impac also disclosed that it had defaulted on two other repurchase agreements sometime after the end of the third quarter. Those facilities were subsequently terminated.

Finally, Impac was in default on a fourth repurchase agreement and a warehouse facility at September 30. The Company requested a waiver of default from each these lenders, but had not received the waivers as of November 13, 2007.

The one-time Alt-A giant admitted that the Company's board of directors had elected to discontinue the mortgage operations, commercial operations and warehouse lending operations -- and incur a pre-tax restructuring charge of approximately $17 million.

Obviously, Impac was not going to file its 10-Q on time, but the SEC is the least of IMH's concerns. Impac closed at just $0.94/share, but with the very real threat of bankruptcy looming overhead, shares may head south quickly after the open today.

Disclosure: none

Comments

[Ram1:]

In no way do I concur with the artical IMH is in recovery and have taken the correct steps to prepair for the future. The market is responding in a positive manner and I expect the growth to continue.

2008 Apr 07 12:52 PM

[Alex S. Gabor:]

You wrote this more than a year ago and it is still struggling...take a look at these articles and give us a fresh look at it:

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2008 Dec 18 02:25 PM