Quantcast
Image: Thinkstock
Image: Thinkstock
Partner Insights

Want to Finance an NPL Portfolio? Show You Can Handle Distress

JUN 19, 2014 5:51pm ET
Print
Email
Reprints
Comment
Twitter
LinkedIn
Facebook
Google+

Buyers of distressed residential mortgages who want financing should tell their prospective backers all about their mistakes, financiers in this niche say.

“We’re going to run into bumps, so I want to know, how do you handle that?” Catherine Oniffrey, a director of residential property finance at Doral Bank, told attendees at SourceMedia’s Distressed Residential Mortgage Summit Thursday. “What the last credit crisis showed us is people react very differently” to stress, she says.

Oniffrey wants to be sure the players her $7.8 billion-asset bank finances won’t freeze in a difficult situation but instead will take constructive action. This is crucial because they are working with problematic assets that are likely to present them with challenges

“This is tough stuff that you guys do,” she said. Her bank is a unit of Doral Financial (DRL) in San Juan, Puerto Rico.

Oniffrey’s fellow panelist Ira Platt, the president of 221 Capital LLC, said he has a similar attitude and often asks mortgage market participants, “What keeps you up at night?”

If he doesn’t like the answers, their chance of getting financing is slim even if the returns from their investments have been extremely strong.

“I’m not doing a transaction unless I like the counterparty, no matter how good the returns look,” Platt said.

Counterparties need to show they can “operationally get through pools” and have reliable expertise on board to do that, from title experts to vendors, he says.

It’s not about the asset, “it’s how you manage it” to resolution, Oniffrey agrees.

Follow the Distressed Residential Mortgage Summit on Twitter: #buysellmortg14

Related:

Market 'Overheated' for Nonperforming Mortgages, Advisors Say

Regs, Thinning of Servicers Squeeze Profits in Distressed Loans

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.
Already a subscriber? Log in here
Please note you must now log in with your email address and password.