Tom Millon and Capital Markets Cooperative, a secondary marketing specialist based in North Florida, are in an enviable position: they have $100 million of Wilbur Ross' money and aim to spend it—though they are in no rush to do so.
“Right now I have five deals sitting on my desk that investment bankers sent to me,” Millon told National Mortgage News. “We're looking at all sorts of acquisitions.”
As for whether any of these deals will come to fruition, that's a different matter.
For now, it appears that Millon isn't likely to spend any of Ross' money on buying mortgage origination firms.
Formed by Millon in 2003, CMC's forte is secondary marketing, that is, working as a market middleman between residential originators and secondary market investors.
Capital Markets Cooperative's job is to bring scale and expertise into the secondary, negotiating a better price for its origination clients—lenders that collectively fund $25 billion a year in home mortgages. It also provides hedging services.
In a recent interview with NMN he confirmed that CMC received a $100 million check from Ross, a well-regarded turnaround specialist who years ago made a name for himself in the steel industry and then late last decade dove head first into the wreckage of the mortgage and banking industries.
“We have a significant amount of capital,” the CMC founder said. “But we are being very patient and cautious about what we do.”
He declined to provide many hints on what type of acquisition Capital Markets Cooperative might make except to say, “We're working on something that might double our client base.”
Millon admitted that Capital Markets Cooperative would like to launch a jumbo conduit but quickly added, “That puts us on a long list of firms that are looking at jumbos.”
He is also careful to point out that although WL Ross & Co. has invested in CMC, his firm has no direct ties to any of Ross' other mortgage-related businesses, including American Home Mortgage Servicing, Irving, Texas, a top 20 ranked loan processor.
“We're not involved with them at all,” he said. “Ross lets his portfolio of companies run their own businesses.” A little over a year ago Ross was exploring the idea of buying United Guaranty, the mortgage insurance division of American International Group. AIG, though, didn't like the low-ball price Ross was offering and eventually nixed the deal.
Recently, American Home said that it would launch a correspondent division to purchase already-funded loans from residential mortgage banking companies. AHMSI is not presently a client of CMC, which hedges mostly originations, not servicing.
