Impac cuts 20% of workforce
July 25th, 2007, 6:17 pm · 49 Comments · posted by Mathew Padilla, Reporter
Impac Mortgage Holdings of Irvine said today it cut 190 jobs, or roughly 20 percent of its staff.
About 43 workers were let go in Orange County.
The job losses, effectively immediately, were made in response to turmoil in the market for bonds backed by mortgages and general credit tightening, said Tania Jernigan, vice president of investor relations.
The company cut about 100 jobs in May. It later added staff with the acquisition of retail lender Pinnacle Financial Corp. of Orlando, Florida.
Impac specializes in loans to people in the midrange credit category, known as Alt-A. As more and more borrowers miss home loan payments, companies beyond subprime are missing earnings targets and reporting job losses.
Impact said last month it would not pay a second-quarter dividend because of higher than expected losses on the sale of foreclosed homes.
Countrywide Financial, the largest U.S. lender, said this week that prime delinquencies are up, especially on home equity loans.
July 25th, 2007 at 6:23 pm
IMPAC IN IRVINE HAS LAYED OFF ANOTHER 150 EMPLOYEES TODAY! THANKS TO THEM AND OTHER MORTGAGE COMPANIES THE UNEMPLOYMENT RATE HAS ROCKETED IN OC!
YET IMPAC IS MAKING SURE THEIR SISTER COMPANIES ARE DOING WELL, (FLORIDA ANYONE?)
tHERE IS A PROBLEM WITH THIS, ISN’T ANYONE AWARE OF WHAT THIS IS DOING TO THE UNEMPLOYMENT IN ORANGE COUNTY?
July 25th, 2007 at 7:36 pm
[...] A huge hat tip to Mathew Padilla over at the Mortgage Insider, who is breaking the story tonight that Alt-A lender Impac Mortgage Holdings laid off 20 percent of its workforce today. [...]
July 25th, 2007 at 8:51 pm
Does anyone know if the former employees(not just Impac but all of the recent casualties) get ’severance’ pay/packages? Having not worked in that industry… what is the standard(roughly speaking)? I presume it varies…
JF
July 25th, 2007 at 11:46 pm
Oh the irony. I commented about their stock from their monthly fact sheets around the time this post came up and I will repost it here below. But first one thing I noticed in the May 2007 report was they cranked up loans in the pipeline and the approval rate going from 50% to 58%. It sounds like they were hoping to ratchet up the volume to make up for the thin profit margins. Only problem is the secondary market got worse so they had more loans with even bigger losses if they sold them at all. You would think they would know that the secondary market isn’t going to like you when your first two deals of 2007 already have almost a 3% deliquency rate for $50 million. Hopefully they didn’t take the same optimistic approach to their derivatives or those “paper” losses are going to look really ugly.
I looked at their monthly fact sheets from May 2006 and May 2007 to look at the YOY numbers.
Loans 90+ days late or foreclosures in 2006 $582.2 million vs. over $1.4 billion in 2007. Yes that is a b for billion and that is an increase of 141%.
The percentage of loans 60 days late in 2006 was 3.45% and in 2007 it is 6.82% almost double. That equals $1.47 billion “worth” of loans 60 days late and you have to wonder how many are now 90.
Loan originations/acquisitions for 2007 dropped 46% from 2006 to only $402.7 million.
So we have $2.87 BILLION in loans that are deliquent by 60 days or more and only $402.7 MILLION in loans coming in. Figure since Joey said he will firesale the REOs that will be a very modest 20% discount on the $2.87 BILLION for a REAL loss of $574 MILLION. If we had the June monthly fact sheet like the SEC says a REIT is supposed to I bet it would be even worse. $18 million in taxable income in a quarter just isn’t going to cover that.
Gee I just don’t understand why their stock has tanked? You might as well add them to the list of the mortgage casualties because it is obvious that they are headed there.
I also rescind my offer to work at Roth Capital. I can’t work for a company that I find embarrassing.
July 26th, 2007 at 8:41 am
Normally I would be cracking jokes, but this time around it’s not as funny. Everyone’s dying! Everyone needs to give 100% to 125% LTV loans again with decent FIXED interest rates, then the borrowers would be able to make the payments. Otherwise, you just slit your own wrists. Panic panic panic…damn sheep.
July 26th, 2007 at 9:35 am
Tania is yanking your chain a little, 190 people does not translate to 20% of the workforce….that would mean they have 950 people working there.
i don’t think so, they were down to 600 in May.
At their height in 2006, they had 950 people but there have many cuts since then.
The rest of the people should get out before they’re asked to leave and the market is flooded with resumes from their co-workers.
July 26th, 2007 at 10:47 am
No job is safe at Impac anymore. Conduit is vaporizing as each minute passes. No chance for survival with all the Pinnacle brick & mortar, combined with their less than enthusiastic retail production.
All those individuals there that have been making ‘big bucks’ better strap on their parachute because they have now re-entered the earth’s atmosphere, and are getting ready to hit their feet back on to the ground at rocket speed.
July 26th, 2007 at 11:38 am
Ok people, they aren’t finished doing layoffs yet. Its supposed to continue thru Friday with a total of 300-400 casualties. Impac is also supposed to make a big announcement today. The conduit side is done with, gone and now they have merged the conduit with wholesale. Total layoffs will be minimal 50%. Joe, Bill and Tania are yanking your chain and pulling numbers from their butts. They have let go people who have been there 10 yrs +. and for those of you that wanted to know about a severange package? Not so much. They will get whats left of any vacation time.
Impac is down to 60 AE’s from 120 AE’s. They are down to the bare minimum in staff in ILG depts such as u/w and funding. Its amazing how Bill Ashmore and Joe keep their highly paid friends and family in when even they don’t have the same knowledge as some of the people they let go that have given 10+ years. Impac does not care about its employees. Never have.
July 26th, 2007 at 1:14 pm
I see Impac as the next New Century. Yes….wasn’t it nice of Bill to hire his daughter back while everyone else is getting fired!! Oh…his nephew is safe too and he works/worked on the conduit side of IFC…oh wait….he has a sister-in-law there too in the QC department. I wonder if they are all safe??!!! It’s so family in there it’s crazy. Oh…Tania in investors relations….her sister also works for the conduit…hmmm…she is safe too. Crazy how it’s who you know…not what you know!!!
July 26th, 2007 at 3:39 pm
BIG PEOPLE GOT BIG DEMOTIONS , AND BIG PAY CUTS , WHO IS LAUGHING NOW . WHEN IT ALL GOES DOWN THEY WILL GET NOTHING AND THATS JUST WHAT THEY DESERVE.
July 26th, 2007 at 5:11 pm
Any names I LAUGH?? Who got demoted? I heard Gretchen Verdugo who sits on the board of directors and on the 7th floor with all the rest of the execs is gone. Pretty sad.
July 26th, 2007 at 5:27 pm
Gretchen is the CFO, it’s hard to believe she got let go…but if she did, WOW!!
July 26th, 2007 at 7:16 pm
Do I sense some bitterness from some former employees? Maybe if you had a better attitude you would still be there. You all need to get your facts straight before you start foaming at the mouth about Impac. And not to worry your ‘little’ selves, Gretchen is still very much a major part of the company.
July 26th, 2007 at 7:17 pm
Point made!
July 26th, 2007 at 8:48 pm
point made , ya right the people that are still there have the worst attitudes in the company , but when you stick with the bad people you are bound to fall , can’t wait til the collapse !!!!!
July 26th, 2007 at 8:53 pm
So was laid off on Wed. good thing, because I am moving out of state.. As far as teh severence. Not as much as the May layoff. It depends on the length of employment. Of course varies with each employee. The funny thing about it all is I knew about 2 weeks prior, and suspected myself as a victim a week prior. Management is terrible at making this a suprise. They try to keep it all secretive as a covert operation, but It is people’s lives.. Good luck to all of my friends staying! xoxxo
July 26th, 2007 at 9:36 pm
It’s odd that someone from Impac (”Knows better”) would respond on the blog and defend Impac.
Sure some posters are bitter but can you blame them, they lost their job(s). On the opposite side, you can’t blame Bill for not firing his family members.
In the end, leaving Impac for them will be a blessing because staying at a company that is on the edge of a cliff is no fun.
Since Gretchen is the CFO, we’ll all know her fate for sure because the company will have to file an 8-K with the SEC if she’s replaced or let go. Stock went into a tail spin from $9 after she was promoted; so it’s not exactly unbelieveable that she would be replaced.
July 27th, 2007 at 3:57 am
Don’t worry good or bad attitude it is the “brains” of the company that will have to deal with their karma. They ramped up the loan volume right before the secondary market got nasty. Their defaults and REOs are increasing and if they fire sale them it won’t be good. Cash is running thin and if they can’t sell their loans it will dry up really fast. Just add them to the mortgage casualty list now.
No I’m not a bitter ex-employee but someone who can see the numbers of a company run by a CEO in a Hawaiian shirt. Come on Joey how can you be taken seriously and why don’t you come here and see how your ex-employees feel with your $18mil taxable gain? No dividend means no more REIT which means those paper losses become real. By the way where is the June monthly fact sheet?
Impac employees if you want a severance short or buy puts on IMH. Disclosure I do not hold a single position on IMH but if I were to it wouldn’t be up.
July 27th, 2007 at 10:41 am
Bye Bye Impac?… Good Luck selling your thousands of foreclosures. Try hiring realtors, instead of having your loan processors sit in on the Open Houses… Cash Flow Issues?
July 27th, 2007 at 12:19 pm
CEO Joe T. has (or used to have) his name plate on his door that says “God”. How would you like working for a guy like that? Spell it backwards and that’s more I like it.
July 27th, 2007 at 3:43 pm
Wow, most of the comments appear to be from ex-employees that were probably terminated for cause. When layoffs occur the rule is you layoff the fringe first and keep your valued employees as long as possible. Performance issues?????
July 27th, 2007 at 5:33 pm
Rule of thumb applies? Value comes at a cost. How do you pay your most valuable employees… Is the ship sinking?
July 27th, 2007 at 9:34 pm
Thank you ‘anitconcerned’…….you said it way better than I did. I find it quite sad that some, such as ‘ i laugh’, appear to be hoping for more layoffs and to see Impac fail. Why is that I wonder? A case of misery loves company? Most likely one of those former employees that should have been terminated long ago, but Impac gave break, after break to.
July 28th, 2007 at 2:35 am
It sounds like the ones defending Impac have their own motives even more so than the ones talking it down. I think we may have another Rahodeb here.
I’m not an ex-employee and even if I were take a look at the numbers. They speak for themself. With the amount of cash they had, the amount of expenses, the amount of REOs increasing, bad derivative investments, no dividend = no more REIT = unrealized gains become real, the losses they are and continue to see on their loans with a ramp up loan volume and the secondary market turning down fast and hard means they are done.
I don’t wish for a company to fail but when you have a company that is in their position and with their executives making these decisions then it is unfortunately doomed. Just like they claimed they weren’t subprime but ALT-A and how they would be fine. Unfortunately cancer spreads.
July 28th, 2007 at 7:08 am
The only ‘motive’ that those of us that are defending Impac have is that we are loyal, dedicated workers that want to keep our jobs, save Impac from closing it’s doors, and hopefully hire back the former employees that love the company as much as we do once things turn around. That’s it, plain and simple. We are defending something we believe in. The bitter ones need not ever re-apply.
July 28th, 2007 at 1:37 pm
Knows Better -
What exactly are you defending?
Your remarks are indicative of someone who is blind to the market conditions and has a deaf ear to the Impac issues at hand.
I can understand defending your job, and the jobs of your co-workers (that’s normal). But, how can you honestly respect executive management and a board that sold out long ago?
This company has been driven by greed as were many similar companies in both the subprime and alt ‘a’ arenas.
Honestly, you remaining employees should be demanding the resignations of your executive management and board. That would show the greatest form of loyalty to yourself, to your existing and former co-workers; and ultimately would send a message to the mortgage banking industry, that the employees can and will make a stance.
July 28th, 2007 at 5:27 pm
Wow….all I can say, as an ex NCEN employee of 5+ years, to all the people left at IMPAC….GET OUT WHILE YOU CAN! Things are gonna get worse, chalk it up to experience..there will be no severance for the ones left, the ones that recently go let go, GET YOUR RESUMES OUT WHILE YOU CAN! There aren’t many jobs, my fellow former colleagues are still having a hard time finding employment after 5mos! My suggestion…commerical lending or hard money…I got lucky after a 4mo search….best of luck to you, and GET THE BLINDERS OFF WHILE YOU CAN!
p.s…by the way, they don’t let the poorer performers go first, they let the higher paying people go first to save money, and keep the dumb folks still drinking the kool-aid on board til the bitter end!
July 31st, 2007 at 10:22 am
I too worked at Impac for 3 1/2 years, when they let me go without any warning,they gave me the severage pay, and the other pay as well. I did enjoy working at Impac and i made several friends along the way.
Since the layoff its been over a year and I still have not been able to find a steady job with medical benifits.
I am a permante temp for a company in Irvine and they have been so kind to me, hopefully in the future they will hire me as a full employee, this layoff has changed my life, finances and has caused me nothing but hard ships and grief.
I am surviving and I thank all the HR and Denise Anderson for all her/ their support in trying to help me with a job replacement.
After several trys back into Impac I finally gave up the mortage industry, I had friends at New Century and they are experincing the layoffs impact on the people.
Friends and co-workers still at large at Impac I wish you all the very best, but in the same token keep your ears and eyes wide open.
If Impac is letting go of the big top players then everybody else take notice.
I loved working at Impac and the job, and the people, this has caused me a great deal of sadness and loss due to this horrible layoff.
My future goals have now changed into a different ball game.
Take care my friends :> aka CATWOMEN
July 31st, 2007 at 6:01 pm
Tami-
Congratulations on your new marriage. I hope you are happy…other than the whole job thing!!
From a former Impac employee.
August 1st, 2007 at 6:24 pm
This is for “graphrix”………..You are annoying.
August 2nd, 2007 at 10:19 am
So…the latest I am hearing is that the company is requiring 32 hour work weeks. This means that they have given everyone a 25% salary cut. I am sure they are hoping people will quit so that they don’t have to have “ANOTHER” layoff and won’t have to pay the last of the employees any severance. So sad. Why don’t they just collapse early and treat the employees with a little more respect and dignity.
So sad…..Keep you posted if I hear anymore juicy details.
August 2nd, 2007 at 5:10 pm
I still work at Impac… If I dont get a severance package, im burning down the building.
August 2nd, 2007 at 6:16 pm
Knows better,
You find the truth annoying? AHM just shut down today. IndyMac’s CEO said “Unlike past private secondary mortgage market disruptions, which have lasted a few weeks or so. . . our industry and Indymac have to be prudent and assume that this present disruption, which appears broader and more serious, might take longer to correct itself.”
Then we have this little snippet:
The private, secondary mortgage market has not totally shut down, according to Andy Chow, portfolio manager at SCM Advisors LLC, a $14 billion San Francisco-based investment firm specializing in fixed-income and structured-finance markets.
The spread between bids and offers has widened in the past week, but trading is still occurring for AAA rated parts of mortgage-backed securities, Chow said.
However, the volume of activity is down dramatically and it’s currently not possible to complete a securitization of so-called Alt-A mortgages, Chow also said. (Alt-A mortgages are offered to more creditworthy borrowers than subprime loans, but they often have adjustable rates and sometimes require little or no documentation of a home buyer’s income).
The largest, AAA rated parts of Alt-A securitizations can be sold, but there are no buyers for the lower rated bits, he explained.
“That’s 5% to 7% of the capital structure that you can’t sell,” Chow noted.
That’s a big problem for mortgage originators, because they partly rely on the securitization process to replenish the cash they need to keep making new loans.
Mortgage originators can instead hold onto the loans. But that requires lots of cash and the big investment banks that have provided the so-called warehouse financing have been pulling back in recent months.
Impac is ALT-A right? Unless you have AAA grade there are no buyers and the AAA is being bought a discount. How long can Impac hang on without the ability to sell their loans? How are the interest rates on the warehouse lines?
Sorry if more bad news annoys you but it will all be over very soon.
August 2nd, 2007 at 9:12 pm
graphrix….
I am not deaf, dumb, or blind to what is going on at Impac and the mortgage industry as a whole, and it’s not the truth, or the bad news I find annoying. It is you and the fact that you seem to be gloating and practically getting off on the idea that Impac may flounder. I just don’t understand why you would be happy about something that can so negatively impact a large number of honest, hard working people. If that is not the case, then you need to tone your arrogance down a few notches…..it’s so intense, it’s screaming out, even in this low-key arena. Maybe you just have anger issues stemming from your childhood you need to address?? I find you, and others with your same attitude annoying, pathetic, etc., etc………….
August 3rd, 2007 at 1:02 am
Knows better,
I even said that I don’t wish for a company to fail. I feel sorry for the hard workers of Impac including the ones that have been laid off. I even feel more sorry for them when somone such as yourself who still works for Impac comes here to kick them when they are already down. That is arrogance, bitterness and lacks professionalism. Then you come here and call me annoying and pathetic.
My issues are not from childhood but are issues of a poorly run company who lays people off because of it and then come to blog to kick them around some more. Maybe if you didn’t sell option arms on the fact of a 3% rebate with a three year prepay that would recast before the three years was up the company wouldn’t have as many issues. Sure your payment is $1200 a month now and in less that two years it will be $4500 but you can refi before then because Impac will be there. It baffles me that this could possibly seen as a sound business practice. It’s like taking the crackhead to the dealer and then buying the crack for him.
I left the mortgage business well before the you know what hit the fan because I saw the writing on the wall. I know many people in the business who didn’t plan for it even when I told them the changes were coming. They wouldn’t listen, failed to plan, hoped some new product would save them and now are either done or seriously struggling. And I have profitted from it, so maybe I feel a bit entitled to be arrogant. I will try to tone it down a bit and hopefully I didn’t offend anyone else. You and I both know that this mess could have been prevented.
By the way where is my June monthly fact sheet and when are the Q-2 numbers going to be announced?
August 3rd, 2007 at 10:59 am
They announced yesterday that effective today-August 3rd, they are temporarily suspended the Alt-A programs. The suspension is due to rapidly deteriorating market conditions for Alt-A products.
I wonder what products they are offering?? They are an Alt-A lender. The layoffs are continuing today. I had a friend let go today. So sad.
They website “about us” section reads “Alt-A is our market expertise.”
Uh oh……they are the next New Century.
August 3rd, 2007 at 11:14 am
Graphrix happens to be right on the money with the comments that are being posted re Impac. It may be difficult to want to understand, especially if readers are still employed at Impac or anywhere else in the mortgage banking industry for that matter.
Impac employees: Defend yourselves and that of your co-workers. Nobody wants anyone to become unemployed. But the reality is that very few will survive this mess… and the stockholders have lost all confidence in this stock and in this sector.
Impac may be a great company to work for when times are good. But from a wall street perspective, this is a company that has been its own worse enemy for some time now.
I’ve mentioned it here before… the remaining employees should storm the top floor of the Impac building and take over. Unfortunetely, that would likely be too little, too late.
August 3rd, 2007 at 11:20 am
impac just started more layoffs today. Is the end near?
August 3rd, 2007 at 11:27 am
STRIKE! STRIKE! STRIKE!!!
August 3rd, 2007 at 3:12 pm
RAISE YOUR HAND IF YOU ARE OR HAVE BEEN AN EMPLOYEE AT IMPAC!!!
EVERYONE WITH THEIR HAND DOWN…
SHUT UP!!!
August 4th, 2007 at 5:10 pm
JeezeLouise!!
I welcome ALL comments regarding Impac, their issues, their lawsuits, their poor decision making, their brain-washing of employees, their utter and complete disregard for credit policy, their complete disconnect between executive management and staffers, and the list goes on.
There are a lot of VERY good people still at Impac… but the majority of the executive team and management should be run out of Newport Beach if not the state of California. Many of which would not be qualified to work anywhere else in the banking industry.
The remaining employees should band together to overrun the building; drop kick the “You Know Who’s” out of the building; (On behalf of the stockholders who are almost completely unaware of their true issues), Seize a few homes at and near the beach; Seize one private jet at John Wayne; and another yacht in Newport.
If you are supportive to these oxygen thieves… then continue on in your ways… Otherwise, let the truth be known.
August 4th, 2007 at 5:35 pm
as an ex employee and i think dr. what was also i agree one hundred percent. if the stock holders were to see how the company is run day by day then they would be shocked as to who and why some of the managers are even in their positions that they are . I loved working there but when a business is run so unprofessionally you wonder why it took so long to start to fall.
August 7th, 2007 at 4:47 pm
Wow,
I had heard about the layoffs but this sounds more like mass slaughter. Loved working there but truthfully I saw this coming and glad I bailed.
August 7th, 2007 at 7:12 pm
I used to work at IMPAC - when things were very well - It was a great place to work; I did very well promoted three times in two years - however, I bailed about a year in a half ago — something is not right there — there are alot of secrets hidden on thw 6th floor, alot of laws (SOX) not being followed, the stories I could tell……. I feel sorry for the workers, who really are loyal to IMPAC, it is the management that has failed everyone so greedy, liars, manipulators — KARMA everything thats happening to them KARMA —-
August 7th, 2007 at 8:45 pm
Sarah-it’s the 7th floor now. They are in a new building on Jamboree/MacArthur. I think they will have a few floors that they can sub-lease since they let everyone go!!
What division of Impac did you work?
August 9th, 2007 at 9:13 pm
No more Alt A and stock market crash, let the countdown continue.
August 10th, 2007 at 3:56 pm
OAKBROOK OFFICE SHUT DOWN TODAY! Hate to be the bearer of more bad news…
Everyone is gone!!!!! All files (only like 20 left after the program cuts) being shipped to Jamboree office. AEs asked to stay on with all future files to be processed in CA.
I talked to an employee at the Jamboree office & got the impression that not too many people have been informed.
Best of luck to all of you that are left!!!!
August 10th, 2007 at 6:47 pm
HAWAII CLOSED!!!! GOOD LUCK !!!