$6.4 billion 4th quarter production
By MortgageDaily.com staff
2/15/2005

Alt-A borrowers with LIBOR-based ARMs originated by loan correspondents fueled record 2004 production at Impac Funding Corp.

The subprime lender acquired and originated nearly $6.4 billion in mortgages during the fourth quarter, off by 7% from the previous quarter, parent company Impac Mortgage Holdings Inc. announced Tuesday.

During 2004, fundings totaled $22.2 billion -- soaring 134% above the previous year's milestone of $9.5 billion.

"We were able to accomplish record levels of mortgage acquisitions and originations as we focus on purchase money transactions as opposed to refinancing transactions," said Impac Mortgage chief executive Joseph Tomkinson in the announcement. "We continue to work with our correspondent customers to help them expand their Alt-A origination platforms in addition to adding new correspondent clients."

Purchase loans represented 59% of the fourth quarter volume.

Alt-A loans accounted for 97% of the quarter's originations, while B/C loans composed the rest, the Newport Beach, Calif.-based lender said.

Ninety percent of the loans were reportedly six-month, LIBOR-indexed adjustable-rate mortgages, of which most were hybrid ARMs.

The correspondent channel's acquisitions made up 90% of the latest production, wholesale and retail contributed 8% and subsidiary Novell Financial Services Inc. added 2%, according to the earnings release announcement.

Looking forward, Tomkinson said, "We expect continued strength in the purchase money market during 2005, which should result in a good year of mortgage production."

To expand Alt-A and total origination platforms last year, Impac focused on providing correspondents and brokers access to and training on its proprietary web-based underwriting system. Last month, it additionally acquired certain assets and assumed selected liabilities along with the hiring of personnel of a wholesale mortgage banker that specializes in the origination of "high quality" Alt-A mortgages -- which will allow it to expand mortgage operations into areas where it does not currently have a significant presence in, it said.

"Our strategy for 2005 includes, among other things, additions to sales personnel to increase our correspondent and broker customer base, further penetration into builder business, the continued marketing of new products and services and high customer service levels," the executive added.

In afternoon trading Tuesday, shares of Impac -- which have traded as high as $27.91 and as low as $17.15 during the past year -- were off nearly a dollar to $20.51 according to Dow Jones.

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