While it is not quite the calvary, more help has arrived for ailing mortgage firms.
Arnstein & Lehr LLP announced Friday its newly launched practice group helps banks and mortgage lenders fight repurchase demands.
The firm, reportedly founded in 1893, claims its “significant bankruptcy and restructuring expertise is invaluable” in analyzing repurchase obligations.
“The group will offer sophisticated analysis of regulatory and other statutory obligations of the mortgage originator or lender and will also provide creative strategies to assess potential exposure, including possible criminal liability,” the Chicago-based firm said. “They will also assist and represent acquirers of entities, including securitized pools, which control or are liable for repurchase contracts to assure fair pricing and maximum value for their clients.”
A California firm is looking to help lenders by purchasing small pools of defaulted first mortgages backed by Southern California properties.
MB Capital Management said last week its services are geared toward smaller lenders and credit unions with pools that are too small to sell on Wall Street.
“It’s a win/win for everyone,” MB President Warren Baker said in the press release. “The lender wins by removing the debt from the books; shareholders win by not having to carry REO servicing costs; and the market wins because MB takes over the loan.”
Mission Capital Advisors LLC recently announced it has helped mortgage investors unload $4.5 billion in subprime and commercial loan portfolios during the past 18 months.
The New York-based “boutique investment bank” said its current pipeline of $750 million is way up from a $200 million monthly average “due to recent overwhelming activity in the secondary market.” Among pending offerings are $350 million in scratch-and-dent portfolios, $200 million in commercial pools and nearly $90 million in residential developmental land loans.
Mission said it moves the portfolios using variations of its traditional dual sealed bid process. Clients reportedly include mortgage companies, banks, hedge funds and private equity firms.
“The domino effect of a sharp drop in housing construction, land development loan defaults, condominium oversupply and the growing wave of single family home defaults are creating a tsunami of sector-specific loan delinquency,” said Mission principal David Tobin in the statement. “This activity is generating a large supply of impaired loans being made available for purchase by secondary market investors.”
Another Mission executive noted, “There is still a significant amount of money chasing distressed loan portfolios, regardless of the recent credit crunch headlines, so the portfolios are still liquid.”
Mesirow Financial Interim Management LLC was recognized by the Turnaround Management Association for the non-operational restructuring of companies with at least $300 million in revenues, according to another recent announcement.
Mesirow’s work on the sale of USA Commercial Mortgage Co. was cited as the large company transaction of the year by TMA — which claims 7,700 members. The lender is headquartered in Las Vegas.
Firms Aid Ailing Lenders
An entire industry has sprung up to help ailing mortgage companies. Among the latest services touted are non-performing mortgage acquisition, repurchase consultation and asset protection.