Impac Mortgage Holdings
has announced that it has instituted a two-week temporary suspension of all lending activity due to concerns over the nationwide COVID-19 pandemic. The company announced that it will maintain a core team to actively manage its business during this two-week span, and will furlough the remainder of its employee base. The company will cover its employees’ costs of health and medical benefits under the furlough period to provide tangible support during this time of hardship.
“The actions and continued lack of communication from one of the company’s whole loan investors has created uncertainty and concern amongst some of the company’s other capital markets counterparties that the whole loan investor in question might breach its mandatory purchase commitment to the company, as required by the contract,” said a release issued by Impac. “In light of these events, the company believes it is necessary to take the temporary and precautionary action of suspending mortgage originations for a two-week interval. The company further believes this interval should permit the unprecedented liquidity being delivered by the Federal Reserve, through its purchases of mortgage-backed securities under its quantitative easing program, to cascade through the financial system to the relief of capital markets participants, independent mortgage originators and servicers and, ultimately and most critically, to the American homeowner.”
The company stated that its unrestricted cash position as of the close of business on March 27 was approximately $80 million.
“The novel coronavirus outbreak continues to have a real-time impact on all business sectors,” said the company in a statement. “The company remains focused on prioritizing liquidity, preserving its business relationships and caring for its employees, their families and its community. The rapid development and fluidity of the effects of the Coronavirus precludes any prediction as to the ultimate adverse impact of the Coronavirus on its business. Nevertheless, the Coronavirus presents material uncertainty and risk with respect to its performance, financial condition, results of operations and cash flows."
Late last week, non-QM specialist Angel Oak Mortgage Solutions announced that it laid off 70 percent of its workforce
, citing serious concerns over the COVID-19 impact on small business and the non-QM borrowing segment.