media.corporate-ir.net
media.corporate-ir.net
ir.impaccompanies.com
these are fact sheets released by IMH every month. The above are Jan 06 and Jan 05 fact sheets. Also linked about is their earnings release for most recent qtr.
Comments:
From last qtr earnings. Impac Funding Corporation ("IFC"), the mortgage operations, acquired and originated $22.3 billion of primarily non-conforming Alt-A ("Alt-A") mortgages for 2005 as compared to $22.2 billion for 2004. Based on the latest mortgage origination statistics, Impac is the 4th largest Alt-A originator in the nation (Source: National Mortgage News 9/30/2005).
Jan 06 acq and origination = $934M
Jan 05 acq and origination = $1,480M
Does not look like they are keeping pace with 2005 so far.
This is especially bad considering:
During 2005, we focused on expanding our mortgage operations and made good progress. We successfully expanded our Alt-A wholesale channel to approximately 3,000 approved brokers in 2005, up from approximately 2,750 the year before. To increase our customer base, we expanded our mortgage operations sales force, hired senior marketing professionals in all of our operating divisions and expanded our reach in Northeast, the Southeast, the Midwest and the Pacific Northwest. By year-end, the results were encouraging. In our Alt-A correspondent channel, which represented 85% of loan production in 2005, we increased our client base to approximately 415 approved customers, up from 250 at the end of 2004.
What is the quality of these alt-a loans? Alt-A loans are supposed to be loans offered to non traditional borrowers with good credit who for one reason or another find it difficult to provide documentations to verify income. Furthermore, LTV are usually lower. It appears IMH borrowers are exactly that:
At December 31, 2005, the average weighted credit score of mortgages held as CMO collateral was 698 and the original weighted average loan to value ("LTV") was 75%. During 2005, we retained $12.2 billion of primarily Alt-A mortgages with an original weighted average FICO score of 694 and an original weighted average LTV of 76%.
However, their default rate has been going up:
2005
Dec 3.12%
Nov 2.42%
Oct 2.43%
Sept 2.18%
Aug 2.22%
July 2.07%
Dec 2004 year end 1.74%
In contrast, GDW's shows no variation in their non performing assets during last yr. Here is there most recent release.
biz.yahoo.com
In summary, I believe that these Alt-A low doc or no doc loans are not as low risk as they once were nor as perceived by the MBS market. Of all the risks that the 5 agency guidelines brought up back in Dec 05, could the Alt-As be the first to crack?
federalreserve.gov
Next week we have consumer credit on Tuesday. It could be rather telling. We shall see if joe6pak still has the will and the ability to borrow and spend.
federalreserve.gov
Ramsey |
