There are whiffs of hope for a revival in nonprime residential lending. Early today National Mortgage News posted a story about Jon Daurio being out in the market with a plan to raise $250 million in seed money. From what we’re told, Daurio is not going after Fannie Mae/Freddie Mac loans. Meanwhile, we know of at least one other industry vet who is talking to Wall Street backers about a nonprime idea. We estimate that two-dozen or so small ‘hard money’ firms are operating out there but their volumes are incredibly small. But all these players have one thing in common: high down payments and home equity requirements. And tight underwriting. If the borrower defaults, they will take the house.
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