Collateral assignment of mortgage David van Horn

[Anthony Dadlani]

Dave Van Horn I just watched your podcast on BP and was quite inspired. Congratulations on your many years of success. I have a rapidly growing portfolio of performing notes and liked your suggestion of collateral assignment of mortgage to free up capital. 1.Could you recommend any banks, funds , or institutions who would be interest in providing capital with this collateral ? 2. What percentage of UPB is common for them to loan against ? Do they take the servicer’s recent statement as verification ? 3. What would be a fair typical rate the investor would offer ? Your reputable advice is much appreciated.

[Jay Hinrichs]

In my day when I did this we called those hypothecations.. and our bank would routinely loan 50% of our UPB.. and the hypothecation was done through the collateral assignment to the bank.

and then when we moved into HML we have nice size credit lines for this

we made a new origination and the bank took the collateral assignment as to 56% of ARV or appraisal.. that's how most of us HML did it pre 08.

it was great we borrowed from the bank at 6 or so and lent out at 15 to 20 and made the delta..

you get big enough lines and its pretty cool business. 

those kind of lines I think are coming back for the bigger HML and crowdfunders maybe a little different set up but same theory.