Sunday, April 05, 2009

IMH Reality
IMH Secured Loan Fund, LLC filed its 10-K last week and it's not pretty. I have not read the entire document, but anyone that bought or sold shares in this company should invest the time to wade through the 10-K. There are many points in the 10-K that concern me and that I could reference, but I don't want to take important information out of context. I will, however, note that IMH posted a non-cash charge of $323.2 million in 2008 to reflect the fair value of its portfolio. This amount was nearly half the company's loan assets. There are 'going concern' disclosures for the company and its manager. Previous company filings, but not the 10-K as far as I have read, had the follow motto prominently displayed:
Rule 1: Don’t lose the money.
Rule 2: Don’t lose the money.
Rule 3: Don’t forget Rule 1 and Rule 2.
This rule no longer applies, as the market has obliterated it. I plan to read through this report in more depth later this week, and I am curious to see what IMH owns and what loan-to-value ratio it used on its land and development loans. Original LTVs of 60% on raw land in Arizona, Nevada and parts of California (Inland Empire, Central Valley) indicate trouble, but I need to verify, not speculate.


Anonymous said...

Looks like IMH has filed with the SEC. Is it my imagination or is this filing to create an IPO? What will happen to the properties if this happens? YIKES

Rational Realist said...

It is a filing to prepare for an IPO. Investors will get several classes of shares, none of which appear will be liquid when IMH does its IPO. This deal deserves more scrutiny than I have time for. The key to me is on the asset side of the balance sheet. Lot prices have been decimated in many of the markets where IMH had loans. The market will let us know whether IMH has properly valued its portfolio.

Christianwalk said...

I requested a list of the properties owned from my broker and he stated they could not release this information to me while they were in a "quit period" of there supposed IPO. So basicaly I have no idea of what I own, perfect!

Rational Realist said...

Christianwalk, While IMH is in a quiet period for its consolidation, you can pull its registration statement and all past quarterly reports and 10-Ks to see what IHM is doing. The registration statement along with most recent 10-q should give you a good idea what is owned.

Christianwalk said...

I have started a Facebook page:
IMH INVESTORS FORUM in hopes that this may help all the investors communicate. Let's help IMH live up to their motto of "DON'T LOOSE THE MONEY"
Bill Arsenault

classlit said...

Are you still following the IMH situation? I see that Christianwalk's Facebook page has not gotten much attention.

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