Today, the Wall Street Journal published an article summarizing the state of affairs for IMH Financial Corporation, formerly doing business as the IMH Secured Loan Fund (the acronym I-M-H stands for "Investors Mortgage Holdings").
Click here to view the WSJ article. [Subscription required to read the entire article]
For those of you who do not have a subscription to the Journal, here are a few highlights mentioned in the article:
- IMH's prospectus assured investors that the fund had built in safeguards to mitigate risk, such as securing personal guarantees from borrowers.
- However, IMH's motto: "Rule 1: Don't lose the money. Rule 2: Don't lose the money. Rule 3: Don't forget Rule 1 and Rule 2" was no match for the downturn in the real estate market.
- IMH's managers earned nearly $93 million in loan origination and modification fees between 2004 and 2009.
- IMH's managers also received $14 million in stock as a result of the conversion.
- IMH incurred costs of $6.2 million to prepare the IPO; however, IMH is unable to offer shares to the public due to an ongoing investigation by the SEC.
