IMH’s Financial Troubles Reported in Today’s Wall Street Journal

news.jpgToday, 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.

Click here to view all IMH blog postings.