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Secondary Market Activity


Secondary Market ActivityRecent portfolio acquisitions, sales and services

July 9, 2008


As one firm unloaded a $64 million delinquent construction portfolio another acquired an $8 million servicing portfolio. Meanwhile, a new fund has been launched to acquire mortgage securities and a new service promises to reduce price fade between initial bid and settlement.

TierOne Bank closed on the sale of a $64 million residential loan portfolio, a June 25 press release from parent TierOne Corp. said. The portfolio included 300 delinquent construction loans originated by TransLand Financial Services — which halted business in October 2007. TierOne had forced TransLand into bankruptcy but subsequently agreed to dismiss it after TransLand agreed to liquidate assets so it could resume remittances on paid loans.

TierOne Chairman and Chief Executive Officer Gilbert G. Lundstrom noted in the statement that they were happy to put the TransLand debacle behind them.

The recent acquisition of an $8 million affordable housing loan servicing portfolio has boosted Multi Financial Services Co. Inc.’s total servicing portfolio to 2,100 loans for $78 million, a recent announcement stated. Servicing is spread over 11 states.

Lend America recently reported that it has received approval to issue Government National Mortgage Association mortgage-backed securities. The approval enables it to obtain better secondary-market prices.

The Melville, N.Y.-based retail lender said its transformation from a subprime lender to an FHA lender three years has led to significant growth.

A high-yield mortgage investment fund has been launched by Advantus Capital Management to take advantage of wide spreads on AAA- to BB-rated mortgage-backed securities, a press release today said. Securities backed by residential and commercial mortgages are being targeted.

Dean Di Bias, formerly managing director and senior vice president of credit portfolio management at GMAC-RFC, has been hired to manage the high yield mortgage investment strategy, according to the St. Paul, Minn.-based fund, which said it manages $19.2 billion.

“The securitization markets have been so damaged by fallout from the housing downturn and its impact on mortgage and other debt securities,” Advantus said, that “spreads on investment-grade securities offer significant compensation for potential credit risks.”

Fasthold Capital announced last week the launch of a loan advisory service settlement optimization process to liquidate distressed assets. The new process provides transparent pricing assets and eradicates any fade in price between the initial bid and the final settlement.

The Orange, Calif.-based firm said it first ensures only qualified principal buyers are bidding, provides credit and property reports to all bidders and provides a loan level price for each asset.

“One of the biggest concerns our customers face is not having accurate information or experiencing a reduction in price from bid to settlement,” Fasthold Managing Partner Michael Castanon said in the announcement. “Our proven [service settlement optimization process] method completely erases those concerns by offering comprehensive market analysis, extensive due diligence and a fail-safe bidding process.”

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of


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