$34.3 Million Pool of Modified Single Family FHA Loans

Transaction Summary
Source ………………………………………………………………………………………. Existing Client
Seller Type ……………………………………………………………………………………………. Dealer
On / Off Market ……………………………………………………………………………… Off Market
Transaction Date …………………………………………………………………………….. April 2012
Pool Description …………………………………………….. $34.3m Modified SF FHA Loans
Location ……………………………………………………………………………………….. National US
Purchase Price ……………………………………………………. ranged from 98% – 101.50%
Wt. Avg. Coupon (WAC) ……………………………………………………………………….. 4.130%
Wt. Avg. Maturity (WAM) …………………………………………………………………… 27.25 yrs

  • The Seller was a Dealer who aggregated the pool from originators and placed into a securitization;
  • Covenants in the securitization documents required any defaulted loans which were subsequently modified (post securitization)
    had to be purchased by the issuing dealer and consequently taken out of the securitization pool;
  • The Seller contacted Elk Rock Capital to sell the modified loans which were purchased out of the securitization pool by the Seller;
  • Dealer’s servicer did not correctly document the modification of the loans, thereby making the saleability of the pool more difficult.

Elk Rock Value-Add: Elk Rock was still able to place the loans with a balance sheet buyer client at a price which was mutually beneficial to both parties considering the transaction’s difficulty.