Mountain Funding Acquires GMAC Unit to Bolster Distressed Real Estate Management Team
(CHARLOTTE, NC) -- It isn't often that an entire team switches jerseys in the middle of a game but that's what happened between two well-known real estate capital market players.
Mountain Funding LLC, a private national real estate investment company based in Parsippany, NJ, absorbed the 14 senior management and real estate professionals from the REO asset management group of GMAC-ResCap's Business Capital Group based in Minneapolis, MN.
As part of the transaction, GMAC-ResCap has engaged Mountain to provide asset servicing and other consulting services for ResCap-BCG's residential development real estate owned (REO) and non-performing loan (NPL) assets nationally. This servicing arrangement covers a portion of the portfolio of ResCap's Business Capital Group, including residential housing development REO properties.
Mountain Funding manages and acquires distressed real estate debt portfolios. Mountain Funding completed this transaction through its asset management affiliate, Mountain Special Servicing, LLC.
ResCap continues to provide mortgage servicing and sub-servicing for a portfolio of approximately 2.6 million mortgage loans, and is the fifth largest mortgage servicer in the nation.
"We have been pursuing this expansion for several months and are very excited to have completed it," said Peter J. Fioretti, CEO of Mountain Funding and its affiliated management company.
"Mountain Special Servicing has become one of the leading asset managers of residential development REO and NPL assets for institutional lenders in the country. As importantly, Mountain Funding will be able to utilize its asset management staff to efficiently underwrite and bid on distressed debt portfolios, an area in which we expect to be a major player for the next three years."
Joining Mountain Special Servicing as managing director will be GMAC-ResCap's former head of ResCap-BCG REO management, Joel Kaul, who will head up the company's residential asset management group. The commercial asset and fractured condo management group continues to be led by Mountain's Brett Peterson.
In addition to its Charlotte headquarters, Mountain's asset managers are located in the following offices, servicing all major markets nationally: Atlanta; Los Angeles; Minneapolis; Washington, D.C.; Scottsdale, Ariz.; and Richmond, Va.
"With close to 30,000 residential lots under management and hands-on knowledge of most active markets in the U.S., we believe we are uniquely positioned to assist lenders holding distressed assets to preserve and enhance their portfolios, and maximize cash recovery in the shortest period of time," said Kaul.
"Our staff has long and extensive relationships with builders and developers located throughout the United States, allowing us to manage and dispose of assets effectively and efficiently.
"Our assignment at GMAC-ResCap required us to develop expertise in all areas of asset management and preservation, including entitlement review, cost control, engineering review, HOA representation, reporting, and creative disposition techniques."
Combined with its existing portfolio, Mountain Special Servicing now has approximately 90 assets under management, totaling over $1 billion in unpaid principal balance.
The assets are diversified over 20 states and include the following property types: residential land development, residential lot development/sale, housing construction/sale, commercial land development, sub-performing retail centers, fractured condos, apartments, and resort development.
Fioretti says Mountain Special Servicing plans to pursue additional asset management business for portfolios of distressed assets owned by REIT's, hedge funds and other institutional lenders.
In addition to its capability to provide asset management services for third party lenders with distressed assets, Mountain Funding is capitalized to invest $1 billion over the next few years in distressed debt and property for its own account.
"The key to successfully and smartly bidding NPL portfolios lies in the strength of the underwriting team," said Arthur G. Nevid, Mountain Funding's chief investment officer.
"With the addition of these experienced former GMAC-ResCap professionals to our existing team, we are extremely well positioned to bid these portfolios. There are few locations or asset types that our people are not experienced with as managers or underwriters, and we have sophisticated underwriting models in place to expedite the process."
"We are ready for a very exciting and opportunistic leg of this cycle," summarized Fioretti. "Mountain Funding was created in the early '90s during the Savings & Loan crisis and developed significant experience in the management and resolution of distressed real estate. We hope to leverage that skill set and experience today."