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Nov 26

By Paul Jackson
November 26, 2008

A recent decision by the U.S. Treasury not to invest in purchasing assets from financial institutions via the $700 billion Troubled Asset Relief Program has jump-started the market for bulk REO sales by banks and other institutional sellers, sources suggested to HousingWire on Wednesday.

Ladera Ranch, Calif.-based G8 Capital is one such firm, and said earlier this week that it has closed its 10th portfolio acquisition from a top-five U.S. financial institution, consisting of 88 California REO properties.

“Activity from sellers has increased more than threefold following the Treasury’s announcement last week, with many sellers expressing a desire to close transactions before year end,” said Daryl Schwartz, vice president of acquisitions for G8 Capital. While we haven’t been given permission to disclose the relevant sellers, HousingWire knows of at least four other bulk REO portfolios that have been put out to bid by large servicers in the past week or so.

On Nov. 12, Treasury secretary Henry Paulson announced that government officials had decided against purchasing troubled assets as part of the financial bailout plan, and said that focus going forward would instead be placed on capital purchases where needed as well as funding market interventions where needed to jump-start frozen fixed-income issuance and trading.

G8 Capital, founded last year by former MoneyLine Lending Services CEO Evan Gentry, said it is looking at acquiring more than $500 million in REO and non-performing loan portfolios next year. But it’s far from the only firm that’s seen its fortunes revitalized by the government’s change of heart in asset purchases.

“We have been approached by an ever-increasing number of banks interested in selling REO in bulk, so it is not surprising that several funds have closed deals in that area,” said Jacob Benaroya, managing partner at Rochelle Park, New Jersey-based Biltmore Capital Group, LLC, a bulk buyer and seller of non-performing mortgage portfolios. “Most banks been very tight-lipped about their REO exposure, preferring that potential investors tell them exactly where they are looking, and what price they are willing to pay before even seeing a list of properties.”

That Benaroya is hearing about the jump in bulk REO transactions is telling in and of itself; he says his firm usually doesn’t purchase bank-owned real estate, preferring to avoid the property management business and purchase non-performing mortgage notes, where his firm can work directly with troubled borrowers to keep them in their homes.

“From the initial announcement of the TARP, we have been skeptical that any government money would involve REO, for the political implications — at that point there is no chance of saving the house for the borrower,” Benaroya said.

Nov 24
  • Completes Bulk Acquisition of 88 California REOs From a Top-Five U.S. Financial Institution;
  • G8 Capital on Track to Acquire Over $150 Million in Portfolio Acquisitions by Year End;
  • Reports Substantial Increase in Seller Activity After the Treasury Secretary Abandons TARP Program;
  • Helps Financial Institutions and REO Holders Get Fair Value for Their Assets Through Quick Closings

LADERA RANCH, CA – November 24, 2008 – G8 Capital announces today that it has closed its 10th portfolio acquisition from a top-five U.S. financial institution. The portfolio consisted of 88 California REO properties. G8 Capital helps financial institutions and other holders of REO assets or non-performing loans get fair value for their assets through very quick closings.

“Banks, investment banks, mortgage companies, and other financial institutions mired in the credit crisis are increasingly turning to G8 Capital because we have available capital and an expert team poised to quickly move distressed assets off their books,” stated Evan Gentry, founder and CEO of G8 Capital. “Many portfolio sellers have been burned by supposed buyers who were unable to perform. Sellers continue to come back to G8 Capital because we deliver on our commitments, typically closing transactions within two to three weeks.”

G8 Capital expects to close two more REO portfolio acquisitions before the end of the year, putting the firm on track to acquire more than $150 million in portfolio acquisitions over the past 12 months. The firm has acquired portfolios from some of the nation’s largest financial institutions and investment banks, as well as smaller regional/community banks. G8 Capital anticipates acquiring more than $500 million in REO and non-performing loan portfolios next year.

G8 Capital has seen a substantial increase in seller activity following Treasury Secretary Henry Paulsen’s announcement to abandon the Troubled Assets Relief Program (TARP) program to purchase distressed assets.

“Activity from sellers has increased more than threefold following the Treasury’s announcement last week, with many sellers expressing a desire to close transactions before year end,” said Daryl Schwartz, Vice President of Acquisitions for G8 Capital.

G8 Capital was founded in 2007 by Evan Gentry. Previously he was the CEO of MoneyLine Lending Services. After co-founding MoneyLine in 1996, Mr. Gentry led mortgage origination efforts for several dozen financial institutions for nearly a decade. Mr. Gentry led the growth of MoneyLine’s outsourced services business to include 50 banks nationwide, and received recognition by Inc. Magazine’s “Inc. 500 Fastest Growing Companies.” He sold MoneyLine to Genpact, a spin-off of GE Capital, near the peak of the market in mid-2006.

About G8 Capital
G8 Capital (www.g8cap.com) buys REO and distressed mortgage loan portfolios, as well as other performing and non-performing loans and real estate. G8 Capital acquires both residential and commercial mortgage portfolios/properties from financial institutions and mortgage companies that are liquidating assets and looking to get fair value. The Company is currently bidding on REO and mortgage portfolios that are worth between $3M and $100M.