GMAC Strikes Asset Management Deal

GMAC-ResCap has entered into a servicing arrangement with Mountain Funding LLC, a national real estate investment company, to provide asset servicing and consulting advice for some of the REO assets in GMAC-ResCap’s business capital group portfolio in a deal that will put a former ResCap-BCG executive at the head of a Mountain unit.

The arrangement, completed through its asset management affiliate, the Charlotte, N.C.-based Mountain Special Servicing LLC, has been in the process for several months. “There were no layoffs associated with this transaction. A small group of employees left ResCap to immediately join Mountain Funding as per agreement between both firms,” said Jeannine Bruin, director of mortgage communications at GMAC Financial Services.

Mountain Funding has absorbed 14 members of senior management from the REO asset group. Joining Mountain Special Servicing as managing director will be GMAC-ResCap’s former head of ResCap-BCG REO management, Joel Kaul, who will head up the company’s residential asset management group. “Our assignment at GMAC-ResCap required us to develop expertise in all areas of asset management and preservation, including entitlement review, cost control, engineering review, HOA representation, reporting and creative disposition techniques,” said Mr. Kaul.

“With close to 30,000 residential lots under management and hands-on knowledge of most active markets in the U.S., we believe we are uniquely positioned to assist lenders holding distressed assets to preserve and enhance their portfolios, and maximize cash recovery in the shortest period of time.” Combined with its existing portfolio, Mountain Special Servicing now has approximately 90 assets under management, totaling over $1 billion in unpaid principal balance.

The assets are diversified over 20 states and include residential land development, residential lot development/sale, housing construction/sale, commercial land development, subperforming retail centers, fractured condos, apartments and resort development. ResCap, the fifth largest mortgage servicer, said it continues to provide mortgage servicing and subservicing for a portfolio of approximately 2.6 million mortgage loans.

The company intends to pursue additional asset management business for portfolios of distressed assets owned by REITs, hedge funds and other institutional lenders. Mountain Funding is capitalized to invest $1 billion over the next few years in distressed debt and property for its own account.

In addition to its capability to provide asset management services for third-party lenders with distressed assets, Mountain Funding is capitalized to invest $1 billion over the next few years in distressed debt and property for its own account.

“The key to successfully and smartly bidding NPL portfolios lies in the strength of the underwriting team,” said Arthur Nevid, Mountain Funding’s chief investment officer.

“With the addition of these experienced former GMAC-ResCap professionals to our existing team, we are extremely well positioned to bid these portfolios. There are few locations or asset types that our people are not experienced with as managers or underwriters, and we have sophisticated underwriting models in place to expedite the process.”

Mr. Nevid noted there is going to be a greater need for special servicing as commercial loans default and get taken back by lenders.

“We want to dispose of these projects as soon as possible. The plan now is probably to put them into a bulk offering. All of the projects might be offered through a national brokerage company and people can buy any portion of that portfolio that they may want to,” he said. “The real purpose of us doing this is to allow Mountain Funding to competitively bid on large debt portfolios that the FDIC is likely to come out with.”