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Distressed Portfolios Finding Buyers

Distressed Portfolios Finding BuyersRecent secondary marketing activity

May 20, 2009

By staff

Two California investment funds — including one launched today — are targeting distressed residential portfolios. In other secondary news, mid-sized banks are being targeted for a new warehouse lending platform, and Freddie Mac outlined revised requirements for conforming jumbo loans.In seller-servicer Bulletin 2009-12 last week, Freddie reiterated that maximum super conforming loan limits are based on the note amount.

Freddie said that an April 25 loan-to-value matrix provided a simplified format but reflected no actual changes in LTV limits.

Sellers were reminded to provide the secondary lender with a certificate of incumbency by the end of this month.

Occasio Distressed Residential Fund has been launched by Redwood Real Estate Partners Inc., according to a press release today.

The Rancho Santa Margarita, Calif.-based investment firm said it “aims to leverage current market conditions and acquire $500 million in distressed residential real estate assets while offering sellers a seamless way of liquidating those assets.”

Dubbed “Occasio ResCap,” the new fund will handle acquisitions. It will also manage risk analysis as well as pricing, underwriting and liquidation.

“Because it is a fully funded entity that is sponsored by Redwood, Occasio ResCap has the capital to close sales and mitigate sellers’ risk,” Redwood stated.

John Duden, a founding partner of Fasthold Capital, will oversee the new entity as its president. Fasthold’s business was similar to that of the new fund; it acquired, restructured and liquidated residential whole loans and real-estate-owned portfolios.

“We launched Occasio ResCap to provide an effective exit strategy to sellers of residential real estate assets looking for liquidity,” Redwood founder and Chief Executive Officer Carl Chang said in the statement.

On May 5, G8 Capital LLC reported its 15th distressed portfolio acquisition. The acquisition consisted of 182 residential REO properties in 27 states.

G8 said that its bid was accepted over a higher bid because it closed the acquisition with just two hours notice. The highest bidder was unable to accommodate a same-day month-end closing.

G8, based in Ladera Ranch, Calif., said it will consider portfolios across the country but prefers to focus on the West. Following loan acquisition, borrowers are approached for loan workouts — including loan modifications.

A turnkey warehouse lending platform has been launched by Mortgage Warehouse Network, a statement Friday said. The offering, targeted at a limited number of mid-sized banks, includes back-office operations, systems and staff.

“Banks have the ability to fund their first loans within 60 days of signing up,” the Houston-based service provider said. “Mortgage Warehouse Network provides the systems, policies, procedures and human capital required to initiate and maintain a warehouse line, in addition to providing the financial modeling and managing the ongoing credit analysis.”

Titan Lenders Corp. offers a competing warehouse platform targeted at community banks and credit unions.

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