Stonegate Mortgage Corp. is rolling out a new system that it says will give home-loan investors greater ability to handpick the debt they want to buy.
The service, which is being introduced Friday, is called TPO Connect, Stonegate Chief Executive Officer Jim Cutillo said. It will offer detailed information about the more than 1,000 brokers and lenders from which the company acquires mortgages, including the performance of their debt, and will enable buyers to bid on individual loans. Seventeen institutional investors, including hedge funds, real estate investment trusts and banks, have signed up, Cutillo said.
The system represents a twist on the more common practice of middleman companies pooling mortgages from smaller originators and selling them in bulk. Stonegate still will acquire the loans before reselling them to investors, while providing some of its normal vetting of the underwriting and more limited contractual promises about its quality, he said.
"From the time of application all the way through closing, investors can come in and look at what they want to buy and bid on it," Cutillo said in a telephone interview. "Our belief is that to bring private capital back into the market the investor is going to want more transparency."
TPO Connect will offer access to loans that can qualify for government-backed programs, as well as bigger jumbo prime mortgages that don't carry federal guarantees, he said. In the future, it may serve as even more of a marketplace, with investors able to buy loans directly, he added.
