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C O V E R S T O R Y / R A L P H S E L L S
Even though defaults continue to decline as property values stabilize, the non-
performing loan market remains active. Naturally, along with these loan sales,
comes a shift in assuming the inherent losses. NPL purchasers are increasingly
becoming the custodians of the mortgage industry's most volatile risks.
Investors and hedge
funds, whose primary focus is distressed
debt, are the unsung heroes of the industry.
Purchasers of NPLs work with servicers to
reduce risk and loss severity, and work with
borrowers to make every attempt to keep them
in their home. If foreclosure is unfortunately
inevitable, investors will seek strategies to allow
the homeowner a dignified exit.
In order to manage this risk and ensure
fiduciary responsibility to investors and their
shareholders, traders must rely heavily on
accurate valuations to make the right decisions.
Many times these valuations come in the form
of broker price opinions, most fulfilled by
nationwide providers relying on local licensed
real estate brokers and agents.
Considering that market modeling and loan
pricing are essential to the process, getting an
accurate value and understanding what that
represents is fundamental.
What follows is a deeper dive into these two
INVESTING?
DO YOUR
HOMEWORK.
Buyers of non-performing loan
valuations should focus on risk
management and due diligence.
