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Oct 26

San Francisco Business Times
By: J.K. Dineen, Reporter and Blanca Torres, Reporter
Date: Friday, October 26, 2012

Gracepoint, a Korean Baptist church, is the new owner of a 70,070-square-foot, three-building complex in Alameda’s Harbor Bay Business Park. The church bought the property for $8.1 million or about $116 per square foot from G8 Capital of Rancho Ladera.
Gracepoint acquired the complex, at 1255, 1265 and 1275 Harbor Bay Parkway, after the property went through a few ownership changes.
The buildings were originally owned by Ellis Partners LLC, which had a mortgage with Bank of America. The lender sold the note on the loan for a discount to G8 Capital last May. G8 Capital then took the deed in lieu of foreclosure from Ellis Partners.

Two of the three buildings had been leased by UT Starcom Inc., a maker of cellphones and parts. The tenant, which had emptied the buildings and consolidated operations to China, agreed to an early termination on its lease.

The third building was already vacant.

To add another twist to Gracepoint’s purchase, the church traded a separate 17,000 square-foot building it owned in Alameda to G8 Capital, which is now selling that property.

Gracepoint will use the Harbor Bay complex for its administrative offices and community functions.

Matt Currie and Bob Tasker of CM Commercial represented UT in its termination of the lease with G8 Capital, and also represented Gracepoint in its purchase of the complex.

Sep 26

By Marilyn Kennedy Melia
Fox News
September 26, 2011

Investors are buying foreclosed single-family homes and renting them out — and they often rent them to families who have lost homes to foreclosure.

“Families that have gotten used to single-family property living typically prefer renting a home as opposed to an apartment,” says Evan Gentry, president and CEO of G8 Capital, a Ladera Ranch, Calif., private equity fund that has bought 3,000 homes, leasing many to renters.

Investors — individuals and large-scale funds — are buying with the aim of offering the houses for rent because selling at a quick profit isn’t possible.

Families who have been through foreclosure are not alone in preferring a backyard to an apartment courtyard, says Claire Williams, 2011 president of the Michigan Association of Realtors. “Transferees are looking to rent the home they’ve left and rent another where they’re relocating. They don’t want to sell because of the decline in values,” Williams says.

Finding Properties
Neighborhoods that have been hit hard by foreclosure or big price drops are especially likely to have single-family homes for rent, says Mike Bowman, owner of Century 21 Mike Bowman, in Dallas.

Moreover, there could be an increase in single-family homes for rent. In August, the Obama administration called for studying how homes owned by Fannie Mae and Freddie Mac could be rented.

One idea being studied, says Josh Fuhrman, senior vice president of the nonprofit Homeownership Preservation Foundation, is for banks to acquire a property and quickly sell to an investor who could then rent it out — possibly to the family who never left the house, even after foreclosure proceedings began.

Many of the current homes for rent are managed and listed by real estate firms, Bowman says. Additionally, the same channels that list apartments, such as Craigslist.com, are likely to advertise homes for rent, says Aaron Murray, vice president of G8Capital.

Meeting Landlords’ Requirements
Investors buying vacant properties often know families recovering from foreclosure are a significant force in the market, and many have adjusted their requirements for eligible tenants. “A careful review of someone’s credit history can often help landlords determine the difference between someone caught upside down on a home or who had a temporary job loss versus someone who has a long history of late or nonpayments,” Murray says.

Bowman says he advises renters to prepare a letter explaining the circumstances that led to foreclosure and how they have recovered financially.

Some landlords “still insist on a credit score of 720,” says Williams. But in some areas, she says, landlords realize the market demands more flexible standards.

Setting Rent Rates
With today’s low mortgage interest rates, it’s possible foreclosed families could pay more in rent than someone with good credit and cash for a down payment would pay for his or her monthly mortgage payment, says Christopher Thornberg, founding principal of Beacon Economics, a Los Angeles real estate and economic consulting firm.

Many families, not just those who have been through foreclosure, says Williams, find that renting is the only financially viable option for them — either because they can’t sell a former home, have poor credit or fear further home price declines.

Planning to Purchase?
When house prices stabilize, Gentry says, their firm and others might offer plans for renters to buy the houses they occupy.

One such method, called “lease option to buy,” involves charging a renter a premium on top of the regular rent rate. The premium, which may be $100 or more monthly, guarantees the renter can buy the home at a certain price at a certain date — for example, two years after the contract is signed.

Another method is the “contract purchase” whereby the renter pays the investor holding the house a mortgage payment for a few years, with the agreement that in a certain number of years, such as three or four, the renter will get a mortgage from a regular lender and be able to assume ownership from the investor. The mortgage payments paid during the contract period are used to reduce the purchase price when the renter gets regular financing.

“It depends on individual circumstances whether these plans will work for the family,” says Barry Zigas, housing analyst for the Consumer Federation of America.

For one thing, “people often misjudge that they’ll be in a house for a certain amount of time. In this volatile job market, you could find you need to move,” Zigas says. He believes individuals are in a poor position to predict what house prices will be.

Moreover, he likes to see part of the premium on a lease option contract to be put in escrow, allowing the money to be used toward the down payment on the purchase.

Individuals should call a housing counselor, says Fuhrman, to analyze whether these purchase plans are viable for them.

Aug 08

By Robbie Whelan
The Wall Street Journal
August 4, 2011

VALLEJO, Calif.—Agustin Gutierrez, a construction worker from this town in the hills northeast of San Francisco Bay, lost his job in 2009, then, 10 months later, he lost ownership of his home.

Now, the husband and father of four rents the same five-bedroom ranch from McKinley Capital Partners, an investment company that’s at the forefront of a new breed of big-money landlords.

McKinley, which has acquired more than 300 foreclosed single-family homes in the Bay Area over the past two years, recently teamed up with Och-Ziff Capital Management Group LLC, a New York hedge fund, with plans to buy at least 500 more foreclosed homes in the next year. Those homes, too, will be rented to people like the Gutierrez family.

Buying foreclosed homes as investment properties has long been dominated by mom-and-pop investors. But now hedge funds, private-equity firms, pension funds and university endowments are dipping into that market. The attraction is double-digit returns at a time when most bonds and other income investments yield very little.

The most popular strategy is for a big investor to team up with a local company that scouts out houses and finds the renters. The hope is to flip the homes in the future when prices recover.

“It’s kind of the Wall Street meets Main Street phenomenon,” says John Burns, an Irvine, Calif.-based real-estate consultant who has discussed investing in single-family rentals with hedge funds. “The Main Street guys need the capital, and Wall Street needs the expertise.”

At the end of May, 3.5 million loans were at least 90 days delinquent or in foreclosure, according to investment bank Barclays Capital. At the same time, the country’s home ownership rate has fallen, to 65.9% in the second quarter of 2011 from its peak of 69.2% in 2004, according to figures released by the U.S. Census Bureau last month. That drop has produced millions of new renters and helped push the vacancy rate for rental housing down by about two percentage points, to 9.2%.

“The single-family rental market is actually quite large,” said Dennis McGill, director of research at Zelman & Associates, a research firm that follows the housing market. “The average American says, ‘If I’ve got two kids and a dog, I can’t live in a one-bedroom apartment.’”

Zelman recently issued a report saying that in Arizona, Florida and Nevada, states hard-hit by the foreclosure crisis, the number of families renting a single-family home increased 48% from 2005 to 2010.

Large institutional investors could eventually help stabilize the market by soaking up the huge overhang of foreclosures, which could allow housing to begin healing. However, the number of single-family homes being bought by institutional investors is still small compared to the millions of distressed properties. The biggest players in the market are deploying hundreds of millions of dollars, not the billions necessary to make a major dent.

The federal government has a large role as well. The Obama administration is currently considering ways of selling foreclosed homes to investors who agree to rent them out. Fannie Mae and Freddie Mac and the Federal Housing Administration own more than half of all unsold foreclosed homes.

Being a landlord can be a costly hassle for large investors. Unlike apartment complexes, which concentrate hundreds of rental units in one place, investors must buy hundreds of single-family houses that are miles apart, each with separate maintenance problems. Tenants can be troublesome.

“You could have a bad tenant who doesn’t want to pay their rent, or maintain the pool,” says Guy Johnson, an investor who buys foreclosed properties in Nevada, Arizona and California and rents some of them out. “A hedge fund manager doesn’t want to have to be their own plumber or electrician.”

Buying foreclosed properties isn’t easy either. Investors sometimes have to pay thousands of dollars in “cash for keys” payments to the previous homeowners in order to entice them to leave the property, and foreclosed homeowners often damage their homes before they are evicted.

Private-equity giant Carlyle Group LLC tried its luck with the single-family home market two years ago but abandoned the strategy late last year after concluding that the returns weren’t large enough. Carlyle’s strategy was different. The company formed partnerships with local asset managers in California that bought and flipped homes, rather than renting them.

For now, more investors are plunging into the single-family rental market. McKinley, the Oakland, Calif., company that owns Mr. Gutierrez’s house, has already begun to use Och-Ziff money to purchase houses. Its model is to buy homes at an average price of about $100,000 apiece, put between $10,000 and $25,000 in renovations into them, and set the rental rate of the house so that it produces a return of 8% to 12% annually. This often works out to a rent of roughly $1,200 per month.

McKinley and Och-Ziff could see additional returns from selling the houses at a higher price after a few years, once the market has improved. “Two years ago no one thought you could scale this business or that it could be institutionalized,” said Gregor Watson, a principal with McKinley. “Now, you can get very good yields. It’s a very good long-term strategy.” He declined to comment on the Och-Ziff investment. Och-Ziff also declined to comment.

Other large investors have formed rental-housing partnerships.

G8 Capital, a private-equity fund based in Ladera Ranch, Calif., has bought 3,000 homes across the country since 2008, mostly to flip them. It decided last year to begin pursuing a hold-and-rent strategy. It has since bought 250 foreclosed homes as rentals. Carrington Property Services LLC, a Santa Ana, Calif.-based property investment company that manages about 4,500 homes nationally, is in talks with investors to raise funds for a real-estate investment trust, to be called Residential National Trust, which would acquire foreclosed homes for rental. The company plans to buy as many as 5,000 more rental homes in markets including Chicago, Miami, Phoenix and Las Vegas.

Waypoint Real Estate Group, an Oakland, Calif.-based company, has bought 700 homes in the past two years as rental properties. Doug Brien, a former place kicker for the New York Jets who is now managing director of Waypoint, says that his company has approached pension funds, university endowments and large private investment groups about investing in his fund. In July, he says he closed on a financing deal from an Ivy League university endowment, but declined to name the university.

“At some point, there will be a shortage of housing,” Mr. Brien said. “Everyone is realizing that single-family buy-and-hold is the way to go.”

In November, hedge fund manager William Ackman’s Pershing Square Capital Management LP released a report arguing that single-family rental properties are an “under-owned asset class” that would make “an intelligent investment for institutional investors.” Pershing Square predicted that investing in single-family homes and holding them as rentals for 10 years could produce double-digit investment returns, even if U.S. home prices only improved marginally.

All the activity is fueling a renewed debate over whether investors are good or bad for the housing market. In the early days of the housing bust, some community groups discouraged banks from selling foreclosed homes to investors for fear they wouldn’t take proper care of the properties. Some communities riddled with foreclosed homes became slums.

Alan Mallach, a senior fellow with the Brookings Institution in Washington, argues that instead of running from investors, local governments should provide subsidies to investors who buy, rent out and are good landlords for foreclosed properties. “If a neighborhood has a high rate of home ownership, that’s obviously better,” he said. “But in some markets, there was so much inventory coming on the market that the sheer number of properties was destabilizing those markets.”

Mr. Gutierrez, the Vallejo construction worker, now pays $1,800 a month in rent, compared to the $2,500 per month he was paying to cover the cost of his mortgage when he owned the house. He says it bothers him that he no longer owns his home, but is happy to pay less and says his new landlords are good property managers.

He bought the house in 2003 for $340,000 using a $322,700 loan. He refinanced the home five times, driving up the total amount of debt on the house to $400,000. He lost the house to foreclosure in 2009. McKinley paid about $155,000 for the house that year.

“It’s confusing, because sometimes I think it’s my house, but I have to remind myself that it’s not,” said Mr. Gutierrez, who says he doesn’t plan to try to repurchase the house. “It’s sad, but it’s what happened to a lot of people.”

Oct 05

By Michael Braga
Tuesday, October 5, 2010

Bank of America sold a 720-square-foot house at 3709 W. 18th Street in Bradenton in June for 91 percent less than the former owner, Rondi Lee Guerin, paid in 2006.

Guerin paid $112,500 for the house and defaulted on a $106,875 loan in October 2007.

Bank of America sold the house to G8 Capital Fund V LLC, an Irvine, California company, for $10,300.

G8 resold the house two month later for $8,600 more than it paid.

The sale was one of 17 properties that the giant North Carolina bank sold in Manatee County at a discounts of more than 60 percent.

In one case, Vince Nunez Enterprises, a Bradenton company managed by Jose V. Nunez-Gomez, bought a 1,312-square-foot house at 5121 21st Street in Bradenton from Bank of America in March for $40,250 and sold it in July for $119,900.

Mar 04

Interview on “Street Signs” with Evan Gentry, G8 Capital CEO and CNBC’s Erin Burnett
March 4, 2009

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.

Jul 30

By Alan Zibel
July 30, 2008

Guess who holds your mortgage now? It’s your friendly neighborhood hedge fund.

Dozens of hedge funds, private equity groups and other investors have plunged into the beaten-down mortgage market in recent months, buying tens of thousands of distressed loans and foreclosed properties around the country. They hope to profit from the woes of banks and other investors holding mortgages that have plummeted in value as home values sink and defaults soar.

They are buying them from Wall Street investment banks eager to rid themselves of bad assets. Merrill Lynch & Co., for example, said this week it would sell mortgage-linked investments once valued at $30.6 billion for just $6.7 billion to Lone Star Funds, a distressed-debt investor in Dallas.

Many of the hedge funds, run by former Wall Street and lending industry executives, claim they can do a better job than banks or other investors of modifying mortgages at terms that consumers can afford.

“We’re much easier to deal with than a bank,” said Jacob Benaroya, managing partner of New Jersey-based Biltmore Capital Group, a hedge fund that’s buying up to $100 million in mortgage debt per year. “We’ve bought (the loan) at enough of a discount that we can make special arrangements with the borrower.”

However, the hedge funds acknowledge that the loans they purchase are often in such trouble that as many as two-thirds to one-half can’t be salvaged. In that case, the fund obtains the property through foreclosure and tries to sell it off, or allows the borrower turn over the house keys in return for forgiving the outstanding mortgage balance.

Edelmira Sayo, a real estate agent in Northern California, wound up turning over a rental property to investment firm G8 Capital this month after falling into financial trouble as her business slowed down and her income dropped.

The investor had offered to cut the value of the $410,000 loan by $50,000, but she still couldn’t qualify for a new loan because the value of her property had plummeted by nearly $100,000.

“If I could have just had it modified, I could have kept it,” she said. “I didn’t want to tarnish my credit report…It’s just so sad.”

Evan Gentry, chief executive of G8 Capital, said the company worked with Sayo for months to help her find a way to refinance the mortgage, but he said it couldn’t be done because of falling property values, tighter credit standards and Sayo’s lower income.

For many such borrowers, he said, “the best move for them is to simply do a deed in lieu of foreclosure and simply start over,” adding that many borrowers “feel a great relief when we tell them it’s OK” to do so.

So far, housing advocates say they haven’t yet seen the impact of such hedge funds among the borrowers they counsel. But they hope these new investors will be more amenable to borrowers interests’ than the current mortgage holders, which have been widely criticized for being sluggish to modify loans amid an unprecedented volume of defaulting loans.

“I have been waiting for this to happen,” said Gabe del Rio, vice president of lending at Community HousingWorks, a nonprofit housing agency in San Diego. “It will equate to a deeper ability to modify mortgages.”

Still, there are some worries that desperate borrowers unwittingly may be giving up protections — such as the right to sue the original lender — when they agree to a modification. “Borrowers are not represented by an attorney or anybody who can advise them about the legal effects of what they’re signing,” said Kurt Eggert, a professor at Chapman University’s law school.

Distressed debt investors, however, emphasize that they are less bureaucratic and more willing to make changes than most loan servicers, which collect and distribute mortgage payments.

“They’ve got too many loans and not enough people,” said Matt Stadler, a principal with investment group National Asset Direct, which currently owns about 750 loans and is looking to double that amount.

Restructuring the loan, when possible, is often faster and less expensive than going through the foreclosure process.

“We’re fully aligned with the interest of the borrower to find a way to make the loan more valuable by keeping them in their home,” said Stanford Kurland, a former Countrywide Financial Corp. executive who founded Private National Mortgage Acceptance Co. Kurland’s company, nicknamed PennyMac, aims to raise $2 billion for mortgage acquisitions.

To negotiate new loan terms with borrowers, some companies are setting up their own loan servicing operations.

For example, Marathon Asset Management, a New York-based hedge fund that specializes in debt investments, has its own loan servicer, Phoenix, Ariz.-based Marix Servicing, to handle the loans it purchases and those for other companies.

The company’s 85 employees handle no more than 200 cases each, compared with 500 or more for more typical loan servicing companies, said Rick Smith, the company’s president. His employees are also more aggressive.

“It’s not just calling somebody once a week,” Smith said. “We might call them on a daily basis, morning noon and night to find the best contact.”

May 01

Homeowners who owe more than their property is worth are offered new terms.

By E. Scott Reckard
Los Angeles Times Staff Writer
May 1, 2008

Jared Lanning, struggling to pay a home loan on which he owed more than his house was worth, was thinking he might just let the lender take back the property. Then he got a call one evening from an Orange County investor who had bought his mortgage.

“I want out of your loan,” said the investor, Evan Gentry, chief executive of G8 Capital of Ladera Ranch, who offered to lower the balance and the interest rate.

Lanning, a crane operator in Englewood, Colo., was skeptical. A phone pitch, after all, had led to his getting the unaffordable loan in the first place. But Gentry was legit: He helped Lanning get a new Federal Housing Administration-insured mortgage — with a $12,000 lower balance. Gentry also paid $5,000 in closing costs for the new loan. Lanning’s new monthly payment is $200 less than before.

Investors — including big fish like former Countrywide Financial Corp. President Stanford Kurland as well as smaller fry like Gentry — are buying loans on the cheap from lenders who want them off their books. By paying less than face value for the mortgages, the new holders can modify loan terms, including shrinking the amount owed, and still make money.

With some economists projecting 2 million foreclosures this year, legislators and regulators are hoping to encourage wide use of this model. They want lenders and investors in mortgage bonds to mark down what borrowers owe and then provide them with lower-cost loans. It’s a tricky business: No one wants to be seen as bailing out speculative buyers or imprudent lenders, but they also don’t want mass foreclosures to devastate neighborhoods and the economy.

The Federal Deposit Insurance Corp. described the problem Wednesday as “a self-reinforcing cycle of default, foreclosure, home price declines and mortgage credit contraction, the likes of which we have not experienced since the 1930s.” The agency is proposing that the government lend $50 billion to 1 million borrowers to help them replace unaffordable loans.

Sub-prime mortgages with interest rates ratcheting higher have proved less of a problem than once feared, because interest rates overall have dropped. But a “toxic combination” of falling home prices and borrowers who can’t afford even the initial low rates on adjustable loans is now the issue, FDIC Chairwoman Sheila C. Bair said in an interview this week.

“Many more borrowers are under water,” she said. “And many more are just walking away.”

Many people bought homes with nothing-down loans at the peak of the housing boom — 29% of all buyers in 2007 made no down payments, Treasury Secretary Henry S. Paulson Jr. said recently. Others have sucked all their equity out of their properties with refinancings.

According to Moody’s Economy.com, some 8.8 million Americans — more than 10% of all homeowners — owe more than their houses are worth, although a Mortgage Bankers Assn. economist contended the figure was lower, perhaps 8%. In any case, there is wide agreement that many of those troubled borrowers have proved surprisingly ready to abandon their properties, even when lenders offer to modify their loan terms as they were encouraged to do by the Bush administration.

“We are working with borrowers to keep them in their homes, but a lot of them really don’t want to stay,” said Babette Heimbuch, chairwoman of FirstFed Financial Corp. of Los Angeles, a savings and loan operator that specialized in adjustable-rate mortgages, including many that were made without full documentation of borrowers’ incomes.

FirstFed has about $6.3 billion in loans on its books. It said that $667 million of that balance, more than 10%, was delinquent or in foreclosure as of March 31, up from just $46 million a year earlier. FirstFed said Wednesday that it lost $69.8 million, or $5.11 a share, during the first quarter this year compared with a profit of $8.4 million, or 61 cents, a year earlier. It set aside $150.3 million for loan losses during the quarter, up from $3.8 million during the first quarter of 2007.

Because FirstFed kept most of its loans on its books rather than selling them, it should have been easier for the company to work with borrowers to modify the loans. Heimbuch said FirstFed forecloses only after analyzing 10 other options to offer the borrower, including lowering the interest rate; changing to a five-year, fixed-rate loan requiring payment of interest only; and writing down the loan balance.

Still, she said, up to 50% of borrowers who miss payments don’t respond to letters and repeated telephone calls to see if something can be worked out.

Some customers had acquired second mortgages and couldn’t make new arrangements with the other lender, she said. “I think some know they told us the wrong income and are afraid to come clean, though we would still work with them . . . to keep them in their homes if possible.”

For struggling borrowers, it’s a big mistake not to return such calls these days, said Gus A. Altazurra, a veteran mortgage executive who recently raised $10 million from private investors to buy and modify loans for which homeowners are still making payments.

“They’re probably going to help you, given the current situation,” said Altazurra, whose Irvine-based Vertical Fund Group has been negotiating with lenders of all sizes to buy loans. He said “a flood” of mortgages went up for sale in April after lenders closed their books on a horrendous first quarter.

Altazurra, who has paid as little as 31 cents on the dollar for some loans, said the terms of some mortgages made at the peak of the boom were hard to believe. One loan he bought from a Texas bank was to a borrower with a very low credit score — 484 — who refinanced and cashed out 100% of the equity in the property, he said.

Gentry, the other Orange County loan buyer, said he had obtained commitments from investors to provide $100 million in capital for workouts on loans that have stopped paying, current loans that can no longer be sold and foreclosed properties. He has bought nearly $50 million in mortgages and property so far.

Gentry purchased Lanning’s loan in a pool of mortgages from a San Diego lender that was going out of business. He said that on average his private venture was paying 70 cents to 80 cents on the dollar for loans like Lanning’s that were still current, and “less if the loans are nonperforming.”

Lanning had no home equity left — and thus had little incentive to keep sacrificing to make payments — before he got the smaller, cheaper FHA loan. Now his outlook has changed.

“We can’t do anything frivolous now,” he said. “But if we do it right, we have enough. That other loan was just pushing us over the top.”

Dec 11

By Marc Hochstein
American Banker
December 11, 2007

Evan Gentry, co-founder and former chief executive of MoneyLine Lending Services Inc., has started a new firm, G8 Capital LLC, that buys distressed mortgage portfolios.

G8 Capital said Monday that it has raised $50 million from “a handful of private individuals,” including Mr. Gentry, for such acquisitions. It is courting “mortgage companies and financial institutions that are liquidating asset portfolios and looking to get fair wholesale value,” it said.

The Ladera Ranch, Calif., company said it is bidding 40 to 75 cents on the dollar, depending on the characteristics, for portfolios in the $3 million to $25 million range. It made its first purchase in November and said it expects to close two or three more deals this month.

MoneyLine, which provides outsourced mortgage origination services, was founded in 1996 and sold 10 years later to Genpact, an Indian outsourcer partially owned by General Electric Co.

Stanley D. Kirst, MoneyLine’s former executive vice president of secondary marketing services, has joined Mr. Gentry at G8 Capital.