The loss totaled $27.10 per share, and compared with a loss of $75.3 million, or $1.18 per share, in 2006, Impac said late Tuesday.
Impac said it lost $1.65 billion from continuing operations in 2007, compared with an $8 million profit a year earlier. The taxable loss available to common shareholders was $136 million, or $1.79 per share. Impac is a real estate investment trust.
The Irvine, California-based company set aside $1.39 billion for credit losses, up from $34.6 million a year earlier, and said capital markets remain "very volatile and illiquid and have effectively been unavailable to the company."
It said until bond spreads and credit trends return to normal, it will be impossible for Impac to conduct mortgage securitizations and loan sales.
Impac had specialized in "Alt-A" home loans, which often go to people who cannot fully document income or assets. Many investors, however, stopped buying such loans. Last September, Impac quit substantially all mortgage lending and halted its dividend.
The company has been slashing costs to account for lower cash flows, and said on Tuesday that it is in talks to convert a $318.7 million obligation into a note.
It said that once it reduces "uncertainty" regarding some of its obligations, it should be able to meet its liquidity needs from cash flows.
Well over 100 U.S. mortgage lenders have been sold, quit lending, or gone bankrupt since the end of 2006.
Impac shares slipped 1 cent to $1.25 in New York on Tuesday.
(Reporting by Jonathan Stempel in Bangalore; Additional reporting by Ajay Kamalakaran in Bangalore; Editing by Kim Coghill)