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Carlsbad, Calif.– Feb. 19, 2009 – A team of leading real-estate finance experts is launching a forward-looking company that will buy and restructure troubled residential mortgages, helping struggling homeowners get back on their feet.
Home Equity Partners, LLC, will acquire troubled mortgage assets in California, Nevada and Arizona at deep discounts from financial institutions eager to be relieved of the burden. Then, the Company can modify the mortgages to make them more affordable for the borrower, while sharing any appreciation in the property with the homeowner.
It is an innovative approach that Home Equity Partners President Chip Larson hails as “a new financial direction” to help institutions and individuals out of the mortgage mess.
“We have the insight, agility and strategic thinking to create a unique business model,” Larson said. “Our approach to troubled mortgage assets simultaneously brings value to financial institutions with distressed assets and to homeowners facing foreclosure.”
Larson described the partnership’s Equity Plus Recovery Mortgage™ -- reaching far more homeowners than government-sponsored programs -- as “the ultimate financial do-over” for homeowners. Describing how it works, he uses a hypothetical example of a “Joe Homeowner” in Irvine, Calif., facing foreclosure after the monthly payment on his $719,960 adjustable-rate mortgage suddenly jumps from $2,661 to $4,247.
With the loan in default, and the home’s value having plummeted from a high of $899,950 to $584,967, the original lender may be pressured to shed the non-performing asset from its books. Enter Home Equity Partners, which acquires the mortgage for $292,484 when it’s put out for bid in a $75 million pool of about 100 similar distressed loans.
If Joe is interested in staying in his home, Home Equity is in a position to forego $134,993 in principal plus all unpaid interest and penalties on the loan – and offer Joe a 30-year, fixed rate loan at 5 percent interest and a monthly payment of $3,140. In return, Home Equity shares in half the equity from any upside future appreciation in the home’s value. Home Equity assigns Joe a certified “credit coach” who over time helps him improve his credit score, eventually making the mortgage sellable to Fannie Mae at its par value of $584,967.
Larson said the business model is designed as a “win-win” for all sides of the deal.
“We bring equity to help American families by providing them with affordable home-finance solutions, allowing them to maintain and reap the benefits of homeownership and equity appreciation over the long-term,” he said. The key to the business model’s effectiveness is the expertise of the partners and the diligence they bring to bear in identifying, pricing and buying mortgage-purchase opportunities.
Most recently, Larson was managing director of Charter Funding (First Magnus Financial Corporation), a retail residential mortgage banking company, where he was directly responsible for division growth to over 50 branch offices with annual funding volume of nearly $2 billion.
Please see the attached profiles of all managing partners of Home Equity Partners.
About Home Equity Partners.
Home Equity Partners, based in Carlsbad, Calif., acquires, manages and sells troubled mortgage assets by leveraging market opportunities for burdened banks and strapped homeowners. For the financial institution with troubled mortgages, the Company’s experienced managers help clear those non-performing assets off the books. For the homeowner, Home Equity Partners offers mortgage solutions allowing them to remain in their homes while sharing in any future appreciation. This innovative business model represents a “new financial direction” for all parties involved. For more information, please visit www.homeeqp.com.
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