As sophisticated mortgage servicing rackets go, it looks like Carrington Capital has the process locked down but good. It also looks quite like they have been bending to to point of breaking. But, who is going to complain? Carrington seems have found the keys to the magic kingdom: screw the senior secured creditors, after all, no one thinks they are popular. Moreover, Carrington manages to accomplish this while appearing to “help” home-debtors. (People, let’s face up to the fact that the couple who is 25% underwater on their real-estate and for whom it is not looking like cram-downs are going to do squat are not “home-owners.”)
Carrington knows it sounds patriotic when they tell parties that they are trying to keep homeowners in their homes by renting out after they foreclose on them,” said a senior bond investor under condition of anonymity. But such a strategy actually increases investor losses, he said.
More importantly, Carrington appears to have little interest in trying to sell the REO properties. I spoke with two REO brokers hired by Carrington Capital last year, who said they are coming to terms with the fact that Carrington Mortgage Services used to them to do its dirty work and propel the myth that it is trying to sell REO properties.
We’ve got the entire article first for a bit of sneak peeking. Enjoy!
Frayed Ends.Carrington Capital.pdf
Yo EP,
Nice post. :)
- 2StopShop
p.s. I really mean it.
SNARF SNARF
It’s important not to let the home-debtors know they’re home-debtors. When they realize this, they stop paying.
I gots the Swine Flu, Pa.
*cough cough*
Not only does Carrington get to cloak itself as defenders of homeownership through their “generous” modifications, but their retention of junior debt shows they have “skin in the game” in contrast to those Wall Street evildoers who didn’t care about credit because they sold off all the risky pieces.
All this as they act with total malevolence towards their investment partners by positioning themselves for a fat OC release by trigger-manipulation.
What a mess. If there’s a solution it’s escaping me at present.
This has been Carrington’s plan from the beginning: to obtain a huge REO portfolio and become the nation’s largest slumlord.
As they say …If it acts like a pig and smells like a pig, then it’s a Rose.
I often use trigger manipulation to strategically release onto my secretary’s face.
so barry o is finally looking at next term….the old people wont be around to vote where as the losers put into their old housing will *barring they are not already convicted felons* — who is the grand ol party gonna run, as elections go its time to start thinkin!!!
EP: high quality…as always; and that includes yesterday’s piece on the “debt victims” and the debt collection company!!!!!
@ 2Stop Shop: nice retraction from yesterday…glad you’re having a better day
@3: spot on
This is about nothing but Carrington
- They own the subs so the cash flow leaks to them at cost of the senior bondholders
- The longer the loan is in the pool the more the servicing fee stream for them
- Better still, they can ‘modify’ all these borrowers and call them current (some servicers are already doing this). This way they can recoup the advances that they have made on these loans to the investors and reduce their funding cost
Of course – as long as you can cloak your interests under the banner of ‘greater good’ and ‘national interest’ – all is fine! Al Gore does it in the name of ‘global good’, whats a little ‘national interest’ compared to that?
At some point you’ve gotta think that Rose and company are keeping this thing going because they’ve burned so many bridges its the only game in town for them.
But I guess on Wall Street, the larger the set, the better the next job.
Manulife is now trying to get senior mbs investors to fire Carrington Mortgage Service shop. Do you think the Canadians have been reading Dealbreaker to learn what Rose was really up to when he claims renting out REO’s is good for all invested in the securities?
Ruth Simon at the wsj must be reading Dealbreaker. Today she follows the Housingwire report on Carrington Mortgage but some how misses explaining how renting out homes helps Carrington hedge fund but not the homeowner.
At least they picked up on the trend three months latter.
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