Capital Markets Today

Welcome to Capital Markets Today and the DDC Financials’ series of European Investment Forum podcasts.  Capital Markets Today listeners can use code NSCM30 for a 30% discount to the European Investment Summit being held in Miami USA on March 8 & 9th 2017 The global financial crisis decimated Spain’s real estate development market and increased the NPL ratio from 1 per cent pre-crisis to more than 10 per cent in 2012. This translated into Spanish banks holding more than €500 billion of distressed assets at the peak of the crisis. Thanks to a comprehensive restructuring of the Spanish financial sector, which included the creation of the Spanish “bad bank” Sareb, which absorbed more than €50 billion of distressed assets, the Spanish banks have been able to reduce the total volume of distressed assets to approximately €215 billion, of which approximately €85 billion are real estate owned properties (REOs). This reduction in the volume of distressed assets has been achieved through sales of portfolios of distr

Welcome to Capital Markets Today and the IMN’s series of NPL & RPL Forum podcasts.  Capital Markets Today listeners can use code SP20 for a 20% discount to IMN’s NPL/RPL Forum East being held on January 19-20th 2017 Researchers from the Urban Institute indicate more pools of non-performing loans need to be sold to private investors.  Earlier this year, a report from the Urban Institute's Housing Finance Policy Center, stated that private investors can do more for borrowers than the government or large institutions, and is encouraging more NPLs to be sold to private investors.  The report summarizes that private investors have greater flexibility to modify nonperforming loans and mitigate losses. As of mid-2016, HUD has sold more than 105 thousand NPLs and FNMA & Freddie have sold more than 40 thousand NPLs.  These large transactions will feed the secondary and tertiary markets in 2017. Joining the broadcast today to discuss NPL trading is David Pollio, Managing Director of Acquisitions at SN Servicing

Welcome to Capital Markets Today and the IMN’s series of NPL & RPL Forum’s podcasts.  Capital Markets Today listeners can use code SP20 for a 20% discount to IMN’s NPL/RPL Forum East being held on January 19-20 2017 According to recent reporting, Fannie Mae and Freddie Mac have sold over 59 thousand non-performing loans with an aggregate unpaid principal balance $11.9 billion. With the addition of three months-worth of data, this bumped the number of loans sold up by nearly 18,000 loans and $3.4 billion from the previously issued data. The number of loans that resulted in foreclosure avoidance also increased within the three months over 5 percent from 12 percent to 17.1 percent as of August 2016. With the information FHFA has received with NPLs sold by December 31, 2015, the agency says that only 31 percent of the loans have been resolved. All this to say that the NPL market will continue to be brisk in 2017 via the primary, secondary and  tertiary markets.  Joining the broadcast today to discuss the NPL

Up until recent years, REITs were the option of choice for investors who wanted to invest in real estate, but lacked a strong professional background in the industry. The economic crisis, low interest rates and the rise of sophisticated trading methodologies led millions of investors to search for alternative ways to search out, invest and manage real estate investments.  Crowd funding became a popular platform for investors to access the market.  Joining the podcast today is Gary Beasley, CEO of Roofstock.   Roofstock is the first online marketplace created exclusively for investing in leased Single-Family Rental homes that generate cash flow day one.  It’s also one of the fasting growing startups and has just announced another $20mm B round participation led by Lightspeed Venture Partners. Prior to founding Roofstock, Gary was co-CEO of Starwood Waypoint Residential, one of the leading single family rental companies in the US.

The single-family rental asset class continues to evolve. At least 29 single-family rental deals have come to market, with issuance over $13 billion. Multi-borrower securitization, including single-borrower and single-property loans, will drive the long-term growth in single-family rental issuance. According to the October 2016 Morningstar Single Family Rental Research report ·       Rents for properties backing single-family rental securitizations rose by 4.6%. ·       Vacancy rates across single-borrower, single-family rental transactions edged up 5.0% in September. ·       Houston had the highest vacancy rate at 7.4%. ·       Some Florida MSAs have shown recent upticks in vacancy. ·       Average retention rates for full-term leases stayed in the mid-70s. ·       Morningstar is currently monitoring 25 single family deals that include over 97,000 properties. Joining the podcast today to discuss single family rental securitizations is one of the authors of the report, Brian Grow, Head of Residential mortgage

IMN Single Family Rental Conference Dec 5-7, 2016.  CMT listeners can use code SP20 for a 20% discount. The fix and flip industry has become a very popular and profitable business as the housing market continues to recover.   According to RealtyTrac, the average return on investment for house flippers grew from about 20 % in 2011 to 35 % to 2015.   In some parts of the country, 8-10 % of all single-family home sales are fix and flips. There are three main financing options for investors to grow their business: bank Loans, private money loans and real estate crowd funding. Joining the podcast today is Mark Filler, CEO of Jordan Capital Finance.  Jordan Capital Finance is a direct private money lender serving residential real estate investors who acquire, renovate, rent, and sell properties. Prior to founding Jordan Capital Finance, Mark co-founded Prism Financial Corporation and was the was the sole founder of Prospect Mortgage which is currently one of the largest independent retail mortgage lenders.

One well-publicized consequence of the housing recession has been a decline in the homeownership rate in the U.S.  Falling house prices, job losses, increased foreclosures, and tightened consumer mortgage credit have all contributed to this trend.  Not only has this led to an increase in the rate of rentership overall, it has contributed ever widening affordable gap for renters wanting to purchase homes and renters looking for affordable rent. Joining the broadcast today to discuss the single family rental environment and the affordability gap is Rael Gorelick with Gorelick Brothers Capital.  Rael Gorelick has primary responsibility for investor relations for the Morrocroft family of funds.  From 2001 until co-founding Gorelick Brothers in 2003, Rael served as a senior marketing and business development consultant for Atlantic Assurance Group. Rael managed Atlantic’s expansion into Texas following that state’s adoption of home equity lending.

Federal Reserve Chair Janet Yellen gave her news conference after the central bank kept interest rates unchanged. Market expectations for a Fed rate hike dwindled ahead of the meeting, amid a lackluster May jobs report and concerns about a British exit from the European Union. Joining the broadcast to discuss the economy, bond prices, the Fed and housing is Brent Nyitray, Director of Capital Markets at iServe Residential Lending.  Brent is responsible for managing iServe’s origination pipeline and Ginnie Mae securitizations. Prior to iServe, Brent was an analyst and trader at several hedge funds as well as ran the European Risk Arbitrage trading desk at Bear Stearns.  Brent is also the author of The Daily Tearsheet, a blog focused on the economy, financial markets and real estate.

Richard Wilson founded The Family Offices Group six years ago and which has subsequently grown to be the largest association in the industry providing training, industry reports, and services to over 1,000 family offices around the globe.  Wilson is also the author of the The Family Office Book which can be found at Barnes & Noble and Amazon.com.  Wilson will discuss strategies for raising capital from Family Offices as well as new trends in co-investment, club deals and direct investments.

It’s called the NEW STANDARD INDUSTRY REFERENCE.  Three volumes of the first ever published book entitled “The Mortgage Professional’s Handbook.  It’s the first resource since the meltdown that discusses every aspect of the business from production, secondary marketing, operations, compliance, technology and finance. Dean Brown, Founder & CEO of Mortgage Capital Management and also one of the authors who wrote the chapter in regard to pipeline risk management joins the podcast to discuss the book and managing pipeline risk. Since 1994, MCM has helped mortgage bankers maximize profitability, decrease earnings volatility and powerfully manage their risks through their unique pipeline and interest rate risk management services and tools. 

LISTEN FOR A SPECAIL OFFER PROVIDED BY REALTYTRAC FOR CMT LISTENRS AT THE END OF THE PODCAST!! The Federal Housing Finance Agency's  Home Price Index (HPI) shows that home prices rose 5.8 percent year-over-year in the fourth quarter of 2015. Prices increased 1.4 percent from the third quarter of 2015, marking the 18 consecutive quarterly price increase in the purchase-only, seasonally adjusted index.  A recent analysis from Capital Economics projects home prices will increase by 6 percent in 2016 with a more modest increases in 2017 at 4 percent.  However, Capital Economics also is projecting that rising interest rates will lead to an economic slowdown in 2018. There are concerns from housing analysts and institutional investors that low mortgage rates have allowed buyers to pay more for homes that would look unaffordable relative to incomes if mortgage rates rose to 5% or 6%.   In addition, global events and low oil prices are causing concern about a decrease in real estate prices in some areas of the U.S. J

The non-performing loan market has swelled in the past few years.  Several billion are sold every quarter just from the GSEs and HUD.  However, the secondary market has become very competitive and buyers need unique strategies and partnerships to acquire notes at more competitive price. Aligning with a non-profit can be beneficial to both the investor and the non-profit.  Many loans are sold from HUD with specific outcome requirements that create a unique secondary market for the right partnership. Joining the podcast is Tim Hayes with Southside Community Development.  Tim works to partner investors and non-profits together in order to become qualified buyers NS Capitals non-performing loan and REO portfolio.

RealtyTrac’s, annual foreclosure report for 2015 is out.  RealtyTrac’s year-end foreclosure report is a unique count of properties with a foreclosure filings during the year based on publicly recorded and published foreclosure filings collected in more than 2,500 counties nationwide. The report highlights some trends that may illuminate the activity to expect in 2016.  Some interesting highlights are Foreclosures starts are downRepossessions are upTimelines downThe report highlights states with the highest and lowest foreclosure starts and metro areas with the greatest risk. Foreclosure rates impact several sectors of the housing and mortgage market and understanding the data to plan strategically is critical to navigate 2016. Joining the broadcast to discuss the annual 2015 foreclosure report is RealtyTrac’s Daren Blomquist. Daren is RealtyTrac’s primary media spokesperson and resident go-to expert on housing and foreclosure statistics and trends. Daren is also managing editor of RealtyTrac’s Foreclosure New

According to a recent Wall Street Journal article, European financial institutions and asset management agencies greatly picked up the pace of sales of distressed assets last year. Deals grew in size, as financial institutions accelerated the deleveraging process and American buyers continue to dominate the field acquiring 77% of all the assets up from 67% the previous year. 2016 is gearing up to be another big year in NPL sales as southern and eastern Europe play a more crucial role in 2016. Joining the broadcast to discuss the European NPL market is Nil Wadehra.  Nil is the Investment Development & Production Manager at DDC Financial Group.  DDC Financial Group acts as a link between sellers and investors expanding the almost non-existent secondary market in many of the countries that hold a large portion of the existing NPL portfolios.  

HUD has announced the latest sale in the Distressed Asset Stabilization Program (DASP) consisting of one offering date with National Pools and Neighborhood Stabilization Outcome (NSO) Pools offered on November 18, 2015.  HUD's NSO offerings will include one pool for which only non-profit bidders or units of local government are eligible to bid. HUD announced significant changes in DASP back in April in order to achieve better outcomes for borrowers. Under the new rules, loan servicers are required to delay foreclosure on a home for a year and evaluate all borrowers facing foreclosure for participation in the government's HAMP or a similar loss mitigation program. The improvements to the NSO sales portion of DASP include giving non-profits a first look at vacant properties, allowing purchasers to re-sell notes to non-profits, and offering a pool of loans for non-profits only. On October 21, 2015, HUD produced a webinar that was geared towards non-profits outlining the process of obtaining bidder approval, repo

HUD has announced the latest sale in the Distressed Asset Stabilization Program (DASP) consisting of one offering date with National Pools and Neighborhood Stabilization Outcome (NSO) Pools offered on November 18, 2015.  HUD's NSO offerings will include one pool for which only non-profit bidders or units of local government are eligible to bid. HUD announced significant changes in DASP back in April in order to achieve better outcomes for borrowers. Under the new rules, loan servicers are required to delay foreclosure on a home for a year and evaluate all borrowers facing foreclosure for participation in the government's HAMP or a similar loss mitigation program. The improvements to the NSO sales portion of DASP include giving non-profits a first look at vacant properties, allowing purchasers to re-sell notes to non-profits, and offering a pool of loans for non-profits only. On October 21, 2015, HUD produced a webinar that was geared towards non-profits outlining the process of obtaining bidder approval, repo

According to a recent article in HousingWire, the recent push by Fannie Mae and Freddie Mac to offload pools of non-performing loans sales will increase the depth of the distressed residential mortgage market, which could have positive implications for banks seeking to sell their own non-performing loans. Fitch analysts believe that residential mortgage NPLs are far less of a threat to the GSEs and banks than they were five years ago, but note that 90-plus day past-due loans are still elevated relative to historical averages and relative to their contributions to total NPL levels. Analysts believe this implies that both the GSEs and the banks remain motivated sellers of NPLs. According to Fitch’s data, FDIC-insured banks held a total of approximately $61 billion in 90-plus days past due one-to-four family mortgages at the end of 2014 compared to Fannie and Freddie who held about $86 billion of 90-plus day delinquent loans. These conditions make a robust NPL market a real possibility for the balance 2015 and b

According to a recent article in Bloomberg, New York’s first real estate project financed significantly though crowdfunding is set to open.  The AKA United Nations is an extended-stay hotel-condominium on Est 46th Street will start taking guests on Sept 10th.  The crowdfunding campaign drew 116 backers, pledging at least $20,000 each. They can expect a return on their investment of 19 percent to 23 percent, mostly from sales of the units and some from hotel fees, according to the mangers.  Another interesting aspect is that 90 percent of the crowdsourced money came from outside the U.S. According to experts, amassing small contributions for real estate is still a very small part of the real estate finance industry, but it has huge growth potential.   Joining the broadcast to discuss real estate crowd funding is AdaPia d’Errico, Chief Marketing Officer at Patch of Land. Patch of Land (POL) is a leading alternative solution for real estate financing that brings borrowers and lenders together through a simple on

Fears over the health of China's economy kept world markets on edge this week and the country will remain in focus, along with the question of whether the Federal Reserve will raise interest rates next month. Those concerns sent world stocks, commodities and currencies on a roller-coaster ride this week, and purchasing manager surveys due on Tuesday are expected to show manufacturing contracted during August in the world's second-biggest economy. Federal Reserve officials who are most anxious to hike interest rates said on Friday that continued turmoil in financial markets may cause the central bank to delay tightening monetary policy beyond next month, even though the U.S. economy remains strong. Joining the broadcast to discuss the economy, bond prices, the Fed and housing is Brent Nyitray, Director of Capital Markets at iServe Residential Lending.  Brent is responsible for managing iServe’s origination pipeline and Ginnie Mae securitizations. Prior to iServe, Brent was an analyst and trader at several hedg

According to a recent article published by Bloomberg, Oaktree Capital has raised $7 billion for a distressed debt fund as it prepares for the economic recovery to falter. For most investors, a capital raise the size of OakTree is simply out of the question.  However, there are still many opportunities in the NPL and distressed real estate space for middle lower market investors especially as FHA, FNMA and Freddie increase their NPL sales creating secondary markets for smaller investors.  Many middle and lower market funds are in active capital raise mode as we head into the 3rd and 4th quarter of the year.   Joining the broadcast to discuss the capital raise process is Bina Shetty, Head of Strategic Advisory at Tremony Capital. Bina Shetty joined Tremony Capital, as the Head of Strategic Advisory with a mission to expand Tremony’s third-party strategic advisory capabilities for lower middle market financial institutions and real estate focused businesses. Prior to joining Tremony, Bina was a Managing Director