1000298--3/13/2009--IMPAC_MORTGAGE_HOLDINGS

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{loan, real, estate}

{stock, price, share}

{investment, property, distribution}

{tax, income, asset}

{condition, economic, financial}

{debt, indebtedness, cash}

{financial, litigation, operation}

{regulation, government, change}

{loss, insurance, financial}

{control, financial, internal}

{provision, law, control}

{personnel, key, retain}

{acquisition, growth, future}

{capital, credit, financial}

Risks Related To Our Businesses If we are unable to generate sufficient liquidity we may be unable to conduct our operations as planned. If we are forced to liquidate, we may have few unpledged assets for distribution to unsecured creditors or equity holders. We have restructured our reverse repurchase financing which requires monthly payments and other payment obligations. If we default under our Restructured Financing, we may be forced to liquidate collateral at less than favorable prices. We do not plan to make dividend payments on our preferred stock or payments on our trust preferred debt obligations in the foreseeable future. Deteriorating mortgage market conditions have had and may continue to have a material adverse effect on our earnings and financial condition. A material difference between the assumptions used in the determination of the value of our residual interests and our actual experience would cause us to write down the value of these securities and could harm our financial position. The Company's mortgage portfolio contains significant interest rate risks that are not currently hedged by the Company. Recent decreases to interest rates could reduce our future cash flows. We may experience reduced net earnings or losses if our liabilities re-price at different rates than our assets. If we fail to initiate our new mortgage-related fee-based businesses or generate other new sources of revenue successfully, our business, financial condition and results of operations could be materially and adversely affected. We may not be able to access financing sources on favorable terms, or at all, which could adversely affect our ability to implement or operate our business as planned. Second trust deed mortgages in our long term investment portfolio expose us to greater credit risks. We may be subject to losses on mortgages for which we did not obtain mortgage insurance. Loans to non-conforming borrowers may expose us to a higher risk of delinquencies, foreclosures and losses. Our commercial and multifamily mortgages may expose us to increased lending risks. The geographic concentration of our mortgages increases our exposure to risks in those areas. Representations and warranties made by us in our loan sales and securitizations may subject us to liability. Our delinquency ratios and our performance may be adversely affected by the performance of parties who service or sub-service our mortgage loans. We are a defendant in purported class action lawsuits and may not prevail in these matters. We are exposed to environmental liabilities, with respect to properties that we take title to upon foreclosure, that could increase our costs of doing business and harm our results of operations. We are subject to risks of operational failure that are beyond our control. Loss of our current executive officers or other key management could significantly harm our business. If we fail to maintain effective systems of internal control over financial reporting and disclosure controls and procedures, we may not be able to report our financial results accurately or prevent fraud, which could cause current and potential stockholders to lose confidence in our financial reporting, adversely affect the trading price of our securities or harm our operating results. Our ability to utilize our net operating losses and certain other tax attributes may be limited. If we revoke our REIT election or if we fail to satisfy the requirements for qualification as a REIT, we will not be able to elect to be a REIT for a period of five years. Violation of various federal, state and local laws may result in losses on our loans. New regulatory laws affecting the mortgage industry may affect our ability to re enter the mortgage markets. We may become subject to certain California corporate laws if certain conditions are satisfied. Our operations may be adversely affected if we are subject to the Investment Company Act. Limitations on acquisition and change in control ownership limit. Risks Related to Ownership of Our Securities A limited market for our common stock and preferred stock, and "Penny Stock" rules may make buying or selling our securities difficult. Our share prices have been and may continue to be volatile and the trading of our shares may be limited. Should we decide to relist our securities on a stock exchange, the criteria for listing may be difficult for us to achieve. Issuances of additional shares of our common stock may adversely affect its market price and significantly dilute stockholders.

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1000298--3/13/2009--IMPAC_MORTGAGE_HOLDINGS_INC