Mortgage vulture fund investor Wilbur Ross has agreed to invest several million dollars in The Capital Markets Cooperative, taking a minority interest in the firm, which caters to both depositories and nonbank residential lenders.
"He's a minority investor in us," CMC CEO Tom Millon told National Mortgage News. "But he could eventually become a majority investor."
Millon declined to comment on how much Ross' WL Ross & Co. will put into the Florida-based CMC, but investment bankers familiar with the company speculated that is likely less than $50 million.
"Wilbur never pays up for anything," said one advisor requesting anonymity. "This is basically a situation where he's throwing them some money and saying 'Go play in the sand box and come up with something.'"
CMC has roughly 50 lenders in its cooperative "but a majority of them are banks," Millon said. The CMC-sponsored firms fund roughly $25 billion a year in mortgages.
CMC operates a secondary market trading desk and tries to obtain volume discounts for its lenders. It also offers hedging services.
WL Ross has been investing in mortgage-related assets on the cheap for three years now. It is the majority owner of American Home Mortgage Servicing of Texas, which services $85 billion of mostly nonprime mortgages. It also holds minority stakes in several domestic banks.
