Capital Markets Today

It has been widely recognized that the high level of nonperforming loans in certain European countries is an obstacle to economic growth and a burden on their banking sectors.  A report published by the European Commission in January 2018 indicates that a comprehensive package of measures for tackling high NPL ratios is being put in place.  One such measure is to set up Asset Management Companies at a national level to more effectively manage distressed debt and real estate.  The report stated that the Asset Management Companies should be modeled on best practices adopted by other more experienced countries. Joining the podcast to discuss the European distressed market is Matt Browndorf, Founder & Chief Investment officer at Distressed Capital Management.  Distressed Capital Management is an asset management firm that employs a vertically aligned group of companies centered around residential real estate in the US and European markets.

CAPITAL PRO CITY SUMMIT - PRAGUE, CZECH REPUBLIC - MARCH 21-22, 2018/ USE CODE NSCM30 FOR A 30% DISCOUNT According to a recent Euromoney article, Changes in legislation in some South Eastern European countries, combined with improving fundamentals, have sparked a brisk trade in bad-debt portfolios as well as facilitating internal work-outs. Joining the podcast to discuss NPLs in the SEE is Dr. Lukas Fecker, Managing Partner at Innovation Brain LLC.  Lukas is a highly regarded turnaround professional who focuses on defining and implementing restructuring strategies within banking.  His current engagements include clients in Cyprus, Greece, Germany and the Middle East.

CAPITAL PRO CITY SUMMIT - PRAGUE, CZECH REPUBLIC - MARCH 21-22, 2018/ USE CODE NSCM30 FOR A 30% DISCOUNT Over the past two decades, Central and South Eastern Europe has experienced remarkable economic transformations.  It is estimated for every single percentage point of growth in the eurozone, the CEE and SEE countries are expected to grow by up to 1.5 to 3.5 percentage points. Joining the podcast to discuss opportunities in Central and South Eastern Europe is Patrick Wigan, Director at Wigan Acquisitions.  Wigan Acquisitions is a family office and private equity backed investment company targeting direct real estate and non-performing loan portfolios across Central and South Eastern Europe.

According S&P, both first and second mortgage default rates rose from November to December 2017. The composite default rate for all consumer credit loans covered by the data analysis was also up from November to December.  Lastly, the default rate on bank cards has been rising consistently since December 2015.  With increased defaults across the board, it is likely that asset managers will need to make strategic default and legal decisions with respect to their portfolio in the coming year. Joining the podcast to discuss strategic decisioning is Leslie Sharpe, Senior Vice President and In-House Counsel for Asset Management and Servicing at Rialto Capital Advisors.  Leslie is responsible for both legal and non-legal functions including risk management, acquisitions, sales, litigation, and bankruptcy.  She oversees the day-to-day operations of the company’s loss share agreements with the FDIC and manages all the audits and state license examinations.  Last year, she was awarded Legal Department of the Year for Outside Counsel Management by the Daily Business Review.

On January 12th, Florida’s Fifth District Court of Appeal ruled that lenders can sue to foreclose more than five years after the first missed payment, but they can’t collect damages for defaults falling outside the window the provided in the statute of limitations. The ruling in Velden v. Nationstar has statewide implications on which foreclosures can survive defense motions to dismiss, and how much plaintiffs can collect if they miss the statue of limitations deadline.  The ruling is significant in a state where hundreds of thousands of foreclosures clogged court dockets after the last real estate market collapse. Joining the podcast to discuss legal issues within the NPL space is Harris Howard, Managing Attorney of the Howard Law Group, a boutique real estate law firm in Florida. Howard Law Group represents servicers, hedge funds and investors in mortgage foreclosure litigation, bankruptcy real estate closings and evictions throughout the state of Florida.

Crowdfunding has been around for a while, as early as 2003. In the early days, musicians and filmmakers were the main forces driving the industry.   However, recent years have shown it to be a truly viable source for funding creative and business projects alike.  Past campaigns have raised millions of dollars for everything from a smartwatch to video and board games, movies and now the acquisition of non-performing loans. Joining the podcast to discuss crowdfunding in the NPL space is Jorge Newbery, Founder and CEO of American Homeowner Preservation LLC or AHP.  AHP utilizes Regulation A+ to crowdfund the purchase of nonperforming mortgages then provides sustainable solutions to struggling homeowners. AHP's current 2015A+ fund has acquired over 2,500 first mortgages with principal balances of over $138 Million in less than 20 months; over 800 investors have supported this effort with as little as $100.

According to a newly released report by Black Knight Financial Services, serious delinquencies increased both month-over-month and year-over-year as of the end of 2017. Florida now has the largest share of severely delinquent mortgages, followed by Mississippi, Louisiana, Texas, and Alabama. Joining the podcast to discuss the NPL market is David Gordon, Managing Director at ARC Asset Management.  Formerly with a Lehman Brothers and Morgan Stanley, David is responsible for purchasing first and second lien mortgages as well as esoteric assets throughout the US, Caribbean and Europe.

According to the S&P Consumer Default Index recently released, the rate of first-mortgage defaults increased in December over November, along with the overall consumer default rate.  The monthly increase was greater for second-mortgage defaults.   Increased and/or steady defaults has potential to fuel the already brisk note trading sector Joining the podcast to discuss the performing and non-performing note market is Scott Schmitz, President of NorthStar Investment Group.   Scott is also the author of “The Note Book, A Common Mans Guide to Owner Financing”.

According to a recent article in USA today, single-family rentals are developing faster than any other portion of the housing market. The rentals outpace both single-family home purchases and apartment-style living, according to the Urban Institute.  Single-family rentals have gone up 30% within the last three years Joining the podcast to discuss the single-family rental market is Alex Hemani, Founder of Alna Group of Companies. In 2006 Alex founded Alna Properties as his investment vehicle and built a portfolio of several hundred SFR along with a firm to provide property management services for the Alna Properties portfolio as well as other SFR investors.  Alex continued to expand his reach with creating “We Buy Homes In USA” to identify SFR investment opportunities across the country.

According to a recent article in Mortgage Professional America, the fastest-growing segment of the housing market today is single-family rentals.  The shift to single-family rentals is being driven by a number of factors, notably tight mortgage credit and millennials’ lifestyle choices, which differ from earlier generations’. For the past three years, single-family rental has hovered around a 30% growth rate, compared with an average growth rate of less than 15% for multifamily during the same period. Joining the podcast to discuss the single-family rental market is Kevin Ortner, President and CEO of Renters Warehouse.  Renters Warehouse manages more than $3 billion in residential real estate, servicing over 18,000 properties and 13,000 investors in over 35 markets across more than 20 states.