The supply of nonperforming mortgages for sale has dried up, leading a Florida-based investment firm to cut its staff by more than a 150 positions.
On Monday, 155 employees of Kondaur Capital Corp. were advised that they would be laid off, the company’s founder, chairman and chief executive officer, Jon Daurio, told MortgageDaily.com in a telephone interview.
The layoffs are planned for April 18. Employees in all departments of the company are impacted by the decision to cut the jobs.
The Orlando, Fla.-based firm claims to be the country’s “largest and most frequent purchaser of non-performing loans secured by one four family residences,” a recent press release said. Its bids on nonperforming loans are often the highest.
During the first three quarters of 2010, a “very large” number of loans were coming to market and business was “frothy,” according to Daurio.
But supply has since diminished.
“Toward the end of 2010, it really dried up,” Daurio explained. “And we see it dried up right now.”
The CEO speculated that the foreclosure affidavit crisis has had an impact on the diminishing supply.
Daurio noted that while many of the company’s competitors hold on the distressed loans for years, Kondaur is in and out of its loans within six months. So the recent change in market conditions has had a much greater impact on Kondaur.
He speculates that the economy will worsen and home prices will continue falling — dragging down the value of nonperforming loans.
He also predicts that sellers of nonperforming loans will “come to their senses” and realize that the prices being offered by Kondaur are better than holding on to the loans themselves.
Daurio predicts that Kondaur will be hiring again a year from now.