| Company: | Impac Mortgage Holdings, Inc. |
| Ticker Symbol: | NYSE: IMH |
| Class Period: | May 10, 2006 to August 15, 2007 |
| Date Filed: | Oct-03-07 |
| Lead Plaintiff Deadline: | Oct-16-07 |
| Court: | Central District, CA |
| Allegations: |
A class action lawsuit was filed in the United States District Court for the Central District of California on behalf of all purchasers of securities of Impac Mortgage Holdings, Inc. ("Impac" or the "Company") from May 10, 2006 through August 15, 2007, inclusive (the "Class Period").
The Complaint charges Impac and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Impac is an acquirer, originator, seller and investor of non-conforming Alt-A residential, commercial, and multi-family mortgages. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company was under-reserving for loan losses as conditions in the mortgage industry deteriorated; (2) that the Company was experiencing an increasing level of loan delinquencies and defaults, which would require the Company to repurchase an increased number of loans going forward; (3) that the Company had failed to write-down the value of certain loans in its portfolio as they declined in value; (4) that the Company was experiencing increasing difficulties in selling its loans, and would be forced to discount prices; (5) that the Company's underwriting guidelines were not adequately restrictive for borrowers in its loan markets; (6) that the Company was paying an increasing number of margin calls, and would be forced to satisfy additional significant margin calls going forward; (7) that, as a result of the foregoing, the Company would be forced to exit the Alt-A lending business and to liquidate its real estate owned portfolio; (8) that the Company lacked adequate internal and financial controls; (9) that the Company's financial statements were materially false and misleading at all relevant times; and (10) that the Company's statements about its financial well-being and future business prospects were lacking in any reasonable basis when made.
On June 26, 2007, the Company shocked investors when it announced that it was not paying a dividend for the second quarter of 2007 because the Company was experiencing higher than expected loss levels as a result of its decision to accelerate the liquidation of its real estate owned portfolio. On this news, Impac's shares fell $1.27 per share, or over 21.6 percent, to close on July 27, 2007 at $4.59 per share, on unusually heavy trading volume.
Then, on August 7, 2007, the Company announced that it planned to exit the Alt-A loan market and that the Company was being forced to pay an increased number of margin calls. On this news, Impac's shares fell an additional $0.48 per share, or 28.2 percent, to close on August 7, 2007 at $1.22 per share.
Finally, on August 14, 2007, the Company announced disappointing financial results for the second quarter of 2007. The Company reported a net loss of $152.5 million, or $2.05 per share, as compared to net earnings of $26.4 million, or $0.30 per share for the second quarter of 2006. The Company revealed that the loss was primarily the result of a $163 million increase in its provision for loan losses, higher delinquencies and severities. The Company also stated that the underlying reason for the deterioration of its financial results was based on the relatively poor performance of the loans that it originated in 2006. On this news, the Company's shares fell an additional $0.45 per share, or 27.2 percent, to close on August 14, 2007 at $1.20 per share, on unusually heavy trading volume.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
The Complaint charges Impac and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Impac is an acquirer, originator, seller and investor of non-conforming Alt-A residential, commercial, and multi-family mortgages. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company was under-reserving for loan losses as conditions in the mortgage industry deteriorated; (2) that the Company was experiencing an increasing level of loan delinquencies and defaults, which would require the Company to repurchase an increased number of loans going forward; (3) that the Company had failed to write-down the value of certain loans in its portfolio as they declined in value; (4) that the Company was experiencing increasing difficulties in selling its loans, and would be forced to discount prices; (5) that the Company's underwriting guidelines were not adequately restrictive for borrowers in its loan markets; (6) that the Company was paying an increasing number of margin calls, and would be forced to satisfy additional significant margin calls going forward; (7) that, as a result of the foregoing, the Company would be forced to exit the Alt-A lending business and to liquidate its real estate owned portfolio; (8) that the Company lacked adequate internal and financial controls; (9) that the Company's financial statements were materially false and misleading at all relevant times; and (10) that the Company's statements about its financial well-being and future business prospects were lacking in any reasonable basis when made.
On June 26, 2007, the Company shocked investors when it announced that it was not paying a dividend for the second quarter of 2007 because the Company was experiencing higher than expected loss levels as a result of its decision to accelerate the liquidation of its real estate owned portfolio. On this news, Impac's shares fell $1.27 per share, or over 21.6 percent, to close on July 27, 2007 at $4.59 per share, on unusually heavy trading volume.
Then, on August 7, 2007, the Company announced that it planned to exit the Alt-A loan market and that the Company was being forced to pay an increased number of margin calls. On this news, Impac's shares fell an additional $0.48 per share, or 28.2 percent, to close on August 7, 2007 at $1.22 per share.
Finally, on August 14, 2007, the Company announced disappointing financial results for the second quarter of 2007. The Company reported a net loss of $152.5 million, or $2.05 per share, as compared to net earnings of $26.4 million, or $0.30 per share for the second quarter of 2006. The Company revealed that the loss was primarily the result of a $163 million increase in its provision for loan losses, higher delinquencies and severities. The Company also stated that the underlying reason for the deterioration of its financial results was based on the relatively poor performance of the loans that it originated in 2006. On this news, the Company's shares fell an additional $0.45 per share, or 27.2 percent, to close on August 14, 2007 at $1.20 per share, on unusually heavy trading volume.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
