Impac Goes Broker, Winds Down TPO

Impac Mortgage is switching to a broker system, winding down its TPO business, and excusing itself from working with the GSEs.

The company announced major changes in a business update this week. The company repositioned its retail consumer direct lending division into a mortgage broker fulfillment model.

“The shift to a broker model allows the company to originate a variety of products that serve its national consumer base at a reduced cost per loan due to significant expense abatement relative to specialized staffing, operations, technology, and business promotion,” the update reads.

Impac will expand its suite of loan products and programs that the broker channel will support. It expects non-QM originations to be the “dominant” product within the broker channel.

The company is also voluntarily relinquishing its GSE Seller/Servicer designation, having had no direct GSE deliveries since 2016 and 2020, respectively. Its designation was already suspended thanks to this period of non-delivery. Impac will act as a TPO for its brokers “as needed.”

Impac is giving up third-party originations altogether as a result of reduced TPO volume and significant margin deterioration in 2022. It will honor its current commitments through wind-down but move to wrap up TPO completely.

The overall theme of Impac’s announcement is keeping costs down. The same update noted a buyout of its commercial space lease, reducing its office space to just 19,000 square feet and maintaining a hybrid work model. This saves the company $8 million dollars.

“The steps the company outlines in this business update continue the theme of eliminating complexity and reducing costs from the company’s corporate and operating verticals, permitting the company to focus on complementary strategic ventures, adjacent revenue opportunities, and attendant capital raise and corporate finance activities,” said George Mangiaracina, Impac’s Chairman and CEO.