Paladin Strategic Partners Acquires Stake in HomeSaver Mortgage Management
|November 16th, 2009||
|Contributed by: Emerging Manager Focus|
|Socially responsible emerging manager Paladin Strategic Partners has acquired a controlling interest in HomeSaver Mortgage Management. Originally formed to utilize private capital in acquiring bank-owned portfolios of troubled mortgage assets, HomeSaver Mortgage Management implements modification and remediation strategies.|
With the number of borrowers facing foreclosure to increase considerably over the next year, conditions favor alternative forms of resolution, consistent with prudential regulation of the banking system, political realities and social responsibility.
With estimates putting over 32% of the 52 million+ U.S. homeowners with ‘upside down’ mortgages, and many housing analysts expecting this to exceed 45% by the end of 2010, the stake acquisition is focused on expanding HomeSaver's various divisions. These include divisions includes non-performing residential mortgage acquisition, management and remediation.
Additional figures show foreclosure actions in 2009 are expected to exceed 3.4 million, and move higher in 2010; repossessions of homes in the U.S. this year are expected to exceed one million, over ten times the rate of a typical year; and over 500,000 repossessions are being held off by foreclosing lenders to benefit the market. Paladin and HomeSaver’s strategy will focus on aggressive mortgage modification.
Carl Webb, Managing Partner of Paladin, disclosed "Many of the current loan remediation programs are simply not working. HomeSaver is uniquely positioned to step in and work with homeowners during this crisis, as well as with selling banks….HomeSaver employs an aggressive and 'socially responsible' workout approach toward loan remediation. We feel that HomeSaver has demonstrated what the non-bank private sector, unburdened by legacy assets, can do to achieve ultimate resolution of the residential mortgage nightmare."
Meanwhile, Len Blum, a Managing Partner of Westwood Capital Holdings, said "recent stabilization in home prices is not likely to be sufficient to reverse the ballooning numbers of foreclosures and underwater mortgages. Nor is it reasonable to expect that residential real estate values will be restored to those of the bubble-era, for the foreseeable future. Consequently, strategies that emphasize eventual loan principal reduction, such as those employed by HomeSaver, are the only realistic alternatives. The banks that are most exposed to the risks posed by legacy loans are signaling their understanding of the predicament they are in, by amassing record levels of balance sheet liquidity, and conserving capital, in preparation for increased loan disposal losses and provisioning.”
Founded in 2009, Paladin Strategic Partners emerging manager is a vertically integrated investment management firm engaged in managing distressed and non-distressed assets. HomeSaver financial asset manager was created to provide private capital with the opportunity to profit from dislocations in the residential mortgage market by focusing on loan remediation, modification and refinancing.