A Mortgage Company That Crashed to Pennies During The Crisis Has Come Back From the Dead

Shares of Impac Mortgage Holdings are surging

Sales of U.S. Previously Owned Homes Probably Rose

Lower prices and mortgage rates have made houses more affordable, which may keep supporting demand.

Photographer: Jim R. Bounds/Bloomberg

Is the U.S. mortgage market set to accelerate? Some investors apparently think so.

Shares of Impac Mortgage Holdings, a California-based company that originates and buys U.S. home loans, are surging a day after it posted first-quarter results. On Thursday, Impac reported a quarterly profit of $34m, reversing a loss recorded in the same period a year earlier. Income was buoyed by the purchase of CashCall, an online mortgage originator that Impac plans to meld with its existing platform and then use to make more nonconforming home loans that aren't insured by the US agencies or government-backed Fannie Mae and Freddie Mac.

The results were exciting enough to send Impac stock soaring by as much as 43 percent to $20.73 at one point on Friday - an intraday move that looks pretty stunning on a six-month basis:

And the move is perhaps even more remarkable when charted against the company's long-term history.

Only seven years ago Impac stock was worth mere pennies as the company, along with the entire US mortgage industry, reeled from the effects of a bursting housing bubble. Before the 2008 crash, Impac specialised in Alt-A mortgages - a category of home loans featuring limited documentation or other risks but that aren't considered as bad as the subprime stuff. Of course, as you can see on this chart there's still a very long way until the stock reaches its old highs.

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