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 Florida USA on March 8 & 9th 2017 Cerberus has raised more than $3.2bn in three dedicated real estate funds in which more than 50% has been invested in European distress debt and real estate.  According to a recent article, Cerberus, who is raising capital for their 4th fund, expects continued significant investment in Europe.  It is estimated that $1.4 trillion of distressed debt is still on the books in Italy, Germany, Spain.  This number does not include some of the hardest hit Southern European countries or eastern Europe. Joining the podcast to discuss the European market and how Family Offices perceive the opportunity is Richard Wilson, CEO & Founder of Wilson Conferences and the Family Office Club.  Richard  helps $100M+ net worth families create and manage their single family offices and currently manages 14 clients including mandates with three billionaire families and as the CEO of a $500M+ single family office and Head of Direct Investments for another with $200M+ in assets.  Richard is also the headline speaker at the European Distressed Investment Forum being held on March 8th and 9th in Miami Florida.

HUD has been selling nonperforming loans insured by FHA since 2010, but it has greatly stepped up the pace of these sales since 2013. In selling these loans, HUD aims to improve outcomes for borrowers. In June 2012, the program was renamed the Distressed Asset Stabilization Program or (DASP).  Also in 2012 HUD issued its first pool of Neighborhood Stabilization Outcome or (NSO) loans, which were concentrated in designated areas. Investors who purchase NSO pools must ensure that at least 50 percent of the loans achieve one of HUD’s approved outcomes.  Subsequently to creating the NSO pools, HUD has also created NSO pools available to bid by HUD approved non-profits only allowing non-profits to engage in the loan sale transactions without competing in against large investors. One lesser known and very important component of DASP is the ability for HUD to sale direct to approved buyers without having to participate in an auction.  Joining the broadcast to discuss DASP and the Direct Sale process is Sennai Cham.  Sennai is a Financial Analyst in the Asset Sales Office at HUD where he assists with developing and executing auctions of severely delinquent loans through DASP.

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 distressed assets, which in 2015 amounted to €15 billion. This figure is likely to reach €19 billion in 2016, and will continue to rise in 2017. Joining the broadcast today to discuss the Spanish NPL market is Manuel Enrich, Investor Relations Director for Sareb.  Sareb is the asset management company for distressed assets arising from the banking sector reorganization.

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.  David Manages and Operates the SN Servicing Trading Desk. He has more than 26 years of experience in Analyzing, Negotiating and Acquiring Performing, Sub-performing, and Non-Performing residential and Commercial assets.

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 market is Jay Tenebaum, Managing Member & Director of Capital Investments of Prosperity Investment Fund.   Prior to launching Prosperity, Jay was an attorney with over twenty years of debt collection experience.

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-backed security ratings at Morningstar Also joining is Kevin Dwyer, Senior Vice President of Morningstar Structed Credit Ratings.  Kevin rates RMBS and Single Family Rental transactions

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.