Impact Of Macroeconomic Trends On Residential Mortgage Industry: Favorable Credit Environment For Whole Loans Sales

[Published by the Loan Sales and Real Estate Sales Desk, Mission Capital]

New York (11/29/2018)

Current market conditions have created a favorable environment to monetize whole loans.
- Strong fundamentals in the labor markets led to vastly improved credit performance and fuller valuations in the loan space.
- Investors continue to recognize the higher returns and wider moat that whole loans offer compared to traditional bond investments.
As a macro-economic backdrop, the unemployment rate is now at its lowest level in almost 40 years and wages grew at a healthy pace of 2.9% over the last 12 months.
Alongside the positive economic developments, loan sale volumes shifted substantially from Non-Performing to Re-Performing loans as loan servicers developed practices to collect more meaningfully on charged off loans and modify impaired loans more effectually.
Meanwhile, the positive credit performance was offset by softness in rates, which sold off in early October in response to Fed hikes and balance sheet run off. Likewise, the Fed’s Dot Plot shows a forthcoming inversion of the discount window, signaling a looming recession.

Given the full valuations and improved performance, it’s an opportune time for banks to sell their assets at attractive levels so they can focus on their core business of originating new loans. Further, this source of loan product provides investment managers an opportunity to diversify their exposure away from traditional bonds and into whole loans or privately structured products that generate more attractive returns. On the buy-side, the strong credit fundamentals provide an opportunity for funds to harvest their lower yielding assets at favorable levels so they can focus on working out more impaired assets.

About Loan Sales & Real Estate Sales

Mission Capital represents preeminent financial institutions, investors and government agencies on the sale of performing, sub-performing and non-performing debt secured by all types of commercial and consumer collateral, commercial real estate investment property and tax liens. For more information, visit www.www.missioncap.com/loan-sales-real-estate-sales

Asset Sales

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Insight on the state of the multifamily capital markets from the Mortgage Bankers Association CREF/Multifamily Convention and Expo

The Mission Capital team spent President’s Day Weekend at the Mortgage Bankers Association (MBA) CREF/Multifamily Convention and Expo in San Diego…and the overall consensus is that commercial real estate lenders, acquirers, and investors continue to seek multifamily properties more than any other asset class.

Not all deals, however, are equal in the eyes of capital sources. Certain multifamily deals are more difficult to finance.

Construction and renovation projects remain the most challenging. The uncertainty of project funding schedules, significant capital expenditures, low occupancies, and a lack of in-place cash flow eliminates many capital providers from participating in these types of transactions. Agency financing is not available for these projects either, as it requires a 90-day history of 85%+ physical occupancy and 70%+ economic occupancy.

By removing Fannie Mae and Freddie Mac from the equation and adding a strong mortgage broker, owners and operators can essentially “auction” their project to the lender with the best terms and lowest rates. Hundreds of viable lending options exist with a wide variety of rates, terms, structures and capital stacks from every type of lender: bridge to agency, CMBS conduits, debt funds, hard money lenders, and mortgage REITs, as well as money-center, regional, and community banks.

Here are some examples of how conducting an “auction” process amongst lenders results in materially better economic and non-economic terms for Mission Capital’s borrower clients:

Queens Plaza South
Long Island City, New York

Senior & Mezzanine:
- $148.5mm Senior
- $40mm Mezzanine
- 90% LTC – Mid single digits blended rate
Added Value:
The Borrower achieved 90% leverage by allowing the land lender to be subordinate to the construction lender. The Borrower was able to dictate final terms by having multiple higher rate construction lenders competing in the final “auction.” Mission negotiated a pay and accrue feature, versus borrowing the full interest reserve that reduced the capital stack by over $4.0 mm. The lower total capital stack reduced the equity required for the transaction.

Multifamily with Retail – Construction
Seattle, Washington

Senior Construction Loan:
- $97.5mm
- 65% LTC
- High 200’s over LIBOR pricing
Added Value:
The Borrower received offers from multiple banks, insurance companies, and debt funds for senior and mezzanine construction financing. The Borrower was able to decrease the spread from an existing relationship lender due to Mission’s “auction.” Financing offers gave the Borrower multiple points of negotiating leverage with relationship lender on proceeds, term, rate, structure, and recourse.

The Equitable Building
Baltimore, Maryland

Senior Bridge Loan:
- $34.3mm
- 70% LTV
- Low 300’s over LIBOR pricing
Added Value:
The Borrower received proceeds to fully refinance the Property and received a $3.0mm earn-out structure. The Borrower saved $1.55mm, after Mission’s advisory on the prepayment of the in-place debt. The Borrower saved an additional $125,000, as Mission negotiated a favorable interest rate cap purchase schedule.

Hollywood/Koreatown Portfolio
California

Senior Permanent Loan Proceeds:
- $79.8mm over 11 loans
Term:
- 65% LTV
- Term: 10 years Interest Only
- Low 400’s WACC
Added Value:
The Borrower was given the ability to upsize the loan 180 days following closing even though standard agency lenders do not typically allow upsizes prior to the loan’s first anniversary. Individual loans provided the Borrower with flexibility and ability to avoid cross-collateralization. Closing with a single lender significantly decreased closing costs. Mission provided the Borrower with higher leverage options from non-agency capital sources- a necessity given a volatile agency market at the time of close.

Click here to learn more about Mission Capital’s Debt & Equity Finance team

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Mission Capital Advisors announced that Christina Carr has joined the firm as managing director of strategic development.

Media Contact: Amanda Ferraro Beckerman

aferraro@beckermanpr.com
201-‐649-‐1186

FOR IMMEDIATE RELEASE

Christina Carr Joins Mission Capital Advisors as Managing Director

of Strategic Development

Former Wells Fargo Bank and HSBC Securities Executive Will Identify Growth Opportunities for the Firm

NEW YORK (May 9, 2016) — Mission Capital Advisors, a leading national real estate capital markets solutions firm, today announced that Christina Carr has joined the firm as managing director of strategic development. In this role, Carr will be responsible for analyzing real estate market conditions to identify and design potential growth opportunities for the company.

With nearly two decades of industry experience, Carr was formerly the managing director and head of operational risk and compliance for Wells Fargo, where she successfully executed the bank’s regulatory compliance and operational risk program for its asset-‐backed, corporate trust and specialized lending businesses. Previously, Carr spent eight years at HSBC Securities in various risk and business development roles, most recently, as head of operational risk and internal controls. Carr has also held positions at UBS Securities and Fannie Mae.

“Christina’s broad experience in capital markets, operational and credit risk management and compliance puts her at a distinct advantage in terms of evaluating the market and our clients’ needs so that we can continue develop value-‐add services,” said Joseph Runk, principal of Mission Capital. “We have known and worked with Christina as a client for more than a decade, and we have great respect for her character, professionalism and industry knowledge.”

In addition to pursuing growth opportunities, Carr will build out Mission Capital’s product offerings around government-‐sponsored enterprises (GSEs) and other government agencies; identifying opportunities in other asset classes and client segments, for both the services and transactional aspect of Mission’s business; and providing transactional support for various risk management services offered by Mission Capital.

In 2011, Carr was included on American Banker’s “Most Powerful Women in Banking and Finance” list, recognized as a member of one of four top teams of female bankers in the U.S. She currently sits on the Advisory Board for Charlotte School of Law’s Compliance Program.

“I look forward to collaborating with Mission Capital’s deep bench of talented executives, and immediately providing value to the firm,” Carr said. “I will look to build upon Mission’s current services, while exploring a wide variety of potential new opportunities.”

Carr earned a bachelor’s from Radford University, and a master’s from George Washington University.

About Mission Capital Advisors

Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York City, Florida, Texas, California, and Raleigh, North Carolina. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across debt, mezzanine, and JV equity placement; commercial and residential loan sales; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $80 billion of loan sale, financing and GSE-‐ related transactions, positioning the firm strongly to provide unmatched loan portfolio valuation
services for both commercial and residential assets. Mission Capital’s seasoned team of industry-‐leading
professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.www.missioncap.com.

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Mission Global, a mortgage services due diligence business and affiliate of Mission Capital Advisors, today announced that Aaron Scott Taylor has joined the firm as compliance officer.

Media Contact: Amanda Ferraro Beckerman

aferraro@beckermanpr.com
201-649-1186

FOR IMMEDIATE RELEASE

Mission Global Continues Rapid Growth with Hiring of

Aaron Scott Taylor as Compliance Officer

Well-Regarded Compliance Professional Brings Valuable Experience to New Position

DENVER, Colo. (April 6, 2016) — Mission Global, a mortgage services due diligence business and affiliate of Mission Capital Advisors, today announced that Aaron Scott Taylor has joined the firm as compliance officer. Taylor will report to A. Dennis Zehnle, chief operating officer of Mission Global, and will be responsible for advising the company’s management and staff on new and changing regulatory risks.

In his new role, Taylor will provide insight on all consumer state and federal laws and regulations governing real estate lending.
“Mission Global is a single-source solution for institutional lenders and regulatory compliance is one of the vital services we provide to the industry,” said Dennis Zehnle, executive vice president of Mission Global. “Aaron is an excellent fit for this role, and we’re confident that he will deliver immediate value to our client base.”
In addition to closely tracking consumer laws and regulations, Taylor will work closely with the firm’s various business units to implement new proprietary systems and software in response to required changes of law related to due diligence processes. He will also serve as Mission Global’s industry liaison, working with outside counsel and other industry groups such as the Mortgage Bankers Association and SFIG.
Prior to joining Mission Global, Taylor held similar positions at Clayton Holdings and Promontory Financial Group, where he consistently tracked new rules and policies applying to the mortgage industry, such as the Dodd Frank Act and other prominent regulatory matters.
“This is an exciting opportunity that will allow me to utilize my previous compliance experience to aid the impressive group of clients that are serviced by Mission Global’s seasoned group of industry professionals,” said Taylor. “I look forward to settling into this new role, and I’m eager to make an immediate impact on Mission Global’s operations.”
Taylor earned his Juris Doctorate from The John Marshall Law School in Chicago, IL and a Bachelor of Arts in Sociology from The University of North Carolina at Wilmington. Taylor also holds a specialty in Elder Law, a Mediation certification, and has studied at universities in Argentina, Australia, Denmark, England, Germany and Scotland.

About Mission Global, LLC

Mission Global, LLC has been formed to unite the capabilities of Mission Capital mortgage services business with the extensive due diligence services and experience of Global Financial Review, to create a single source solution for investors. Mission Global services will now include data integrity review, collateral document review and cure, curative title work, agency delivery and trade support, due diligence and securitization support, regulatory compliance, origination support, re-underwriting, and forensic reviews. For more information, visit www.missionglobal.com.

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Mission Capital Advisors and its subsidiary Mission Global, a mortgage services due diligence business, announced the hiring of William Horning as a director with the residential mortgage group.

Media Contact: Amanda Ferraro Beckerman

aferraro@beckermanpr.com
201-‐649-‐1186

DRAFT FOR REVIEW

Mission Capital Advisors and Subsidiary Mission Global Hire William Horning As Director of Mortgage Operation

Mortgage Industry Professional Brings More Than 16 Years of Experience

in all Facets of Residential Whole Loan Finance

NEW YORK (Feb. 25, 2016) — Mission Capital Advisors, a leading national real estate capital markets solutions firm, and its subsidiary Mission Global, a mortgage services due diligence business, today announced the hiring of William Horning as a director with the residential mortgage group.

With nearly two decades of experience in residential whole loan finance, Horning will assume a senior role in both Mission Capital Advisors’ residential whole loan trading operation and Mission Global’s due diligence and mortgage services operation.

“As we continue to expand our offerings, Bill is the perfect fit from both a loan trading and mortgage services standpoint,” said Ray Ralph, managing director of operations with Mission Capital Advisors. “We were immediately impressed with Bill’s breadth of experience and long history in whole loan finance and we’re confident he will offer our clients the high level of service that has become synonymous with the Mission name.”

With extensive experience in residential whole loan transaction management, Horning looks forward to making an immediate impact on Mission’s mortgage services and loan trading business. “Mission’s collaborative culture and stellar reputation are initially what attracted me to this position,” said Horning. “I am thrilled to join Mission Capital and Mission Global, and be a part of the team.”

Prior to joining Mission Capital Advisors, Horning served as a vice president with Morgan Stanley, handling contract finance duties and conduit implementation for the firm’s residential mortgage trading desk. Horning worked previously in similar capacities as an associate director with Five Mile Capital Partners and a director with UBS. In addition, Horning served as a vice president with American Mortgage Consultants, managing multiple due diligence processes for both seasoned loans and new origination/conduit residential loan platforms. He started his career at Lehman Brothers working in residential mortgage servicing and operations.

Horning holds a Bachelor of Arts in Business and Economics from Muhlenberg College.

About Mission Global, LLC

Mission Global, LLC has been formed to unite the capabilities of Mission Capital mortgage services business with the extensive due diligence services and experience of Global Financial Review, to create a single source solution for investors. Mission Global services will now include data integrity review,
collateral document review and cure, curative title work, agency delivery and trade support, due diligence and securitization support, regulatory compliance, origination support, re-‐underwriting, and forensic reviews. For more information, visit www.missionglobal.com.

About Mission Capital Advisors

Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York City, Florida, Texas, California and Mobile, Al. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across commercial and residential loan sales; debt, mezzanine and JV equity placement; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $65 billion of loan sale and financing transactions, as well as in excess of $14 billion of Fannie Mae and Freddie Mac transactions, positioning the firm strongly to provide unmatched loan portfolio valuation services for both commercial and residential assets. Mission Capital’s seasoned team of industry-‐leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information,
visit www.www.missioncap.com.

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Source: Commercial Observer

Mission Capital has hired Terry Strongin in the firm’s Palm Beach Gardens office, and Rob Beyer will relocate to the location as well.

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Source: Commercial Real Estate Direct

Mission Capital has hired Terry Strongin as a director to its debt and equity finance group in the Palm Beach Gardens, FL office. Director Rob Beyer has also relocated to the FL office.

Mission Capital Beefs Up Southeast

Presence

Tuesday, 12 May 2015

Mission Capital Advisors has hired Terry Strongin, a 16-year industry veteran, as a director in its debt and equity finance group.
Strongin is based in the New York company's Palm Beach Gardens, Fla., office. He previously was founder and managing member of Equity 24 LLC, a West Palm Beach, Fla., investment operation. And before that he was director of capital markets lending at Bond Street Capital. He also had been with Ocwen Financial Corp. as vice president of commercial lending.
Joining Strongin, who will arrange debt and equity for clients, at Mission's Palm Beach Gardens office is Rob Beyer, who is relocating from the company's New York office. He joined Mission two years ago from Siegel Group, a Las Vegas investor, where he was general counsel. He previously was with Related Cos. and Carlton Group. The two will also structure sales transactions.
The additions to the Florida office are part of an effort by Mission to expand its capabilities in the southeastern United States, where it has arranged some $550 million of equity and financing since 2010.
David Tobin, president of Mission, said its expanded focus on the region is driven by its "strong economic activity and growth prospects." He added that the company would continue to add staff in the region.

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Source: Real Estate Finance & Investment

Mission Capital is expanding its Southeast presence with two new additions to its Palm Beach Gardens office.

Mission Capital expands southeast

presence

May 1, 2015

Mission Capital is expanding its Southeast presence with two new additions to its Palm Beach Gardens office. Terry Stronginis joining as director in the Debt and Equity Finance Group andRob Beyer will be relocating from the firm’s New York City headquarters as a director in the same group.

Prior to joining the team, Strongin headed the commercial lending group for a major REIT, and worked as a principal in boutique real estate investment and advisory companies. He will now be responsible for sourcing, structuring and executing debt and equity financing across the US.

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Source: The Real Deal

Terry Strongin and Rob Beyer were hired at Mission Capital Advisors’ Palm Beach Gardens office.

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As part of a strategic plan to grow its Florida presence and expand its Southeastern U.S. coverage capability, Mission Capital Advisors announced a significant new hire and the relocation of one of its top executives.

Media Contact: Ryan Smith rsmith@beckermanpr.com

201.465.8023

FOR IMMEDIATE RELEASE

Mission Capital Expands Southeastern U.S. Presence With Two

Additions to Florida Office

Terry Strongin Joins Firm as Director, While Director Rob Beyer Relocates from NYC

PALM BEACH GARDENS, Fla. (April 29, 2015) — As part of a strategic plan to grow its Florida presence and expand its Southeastern U.S. coverage capability, leading real estate capital markets solutions firm Mission Capital Advisors today announced a significant new hire and the relocation of one of its top executives.

A veteran of the commercial real estate and securities industries, Terry Strongin joins Mission Capital’s Palm Beach Gardens office as a Director in the Debt and Equity Finance Group.

Additionally, Rob Beyer, also a Director in Mission Capital’s Debt and Equity Finance Group, will relocate to the Palm Beach Gardens office from the company’s headquarters in New York City.

Since establishing a presence in Florida, Mission Capital has proved to be one of the Southeast’s most active arrangers of real estate debt and equity. Since 2010, the firm has arranged 12 deals in the Southeast, with a total value of approximately $550 million.

Noteworthy financings arranged by Mission Capital in Florida include the $16.75-million first-mortgage financing of Doral Court, a 209,075-square-foot office building in Doral; the $21-million refinancing of the Freehand Miami, a 256-bed, upscale boutique hotel located in Miami Beach; the $19.2-million construction financing of Sage Beach, a 24- unit luxury oceanfront condominium development in Hollywood; the $106-million construction financing of Echo Aventura, a 190-unit luxury condominium high-rise in Aventura; the $10-million acquisition financing for Hotel 18, a 45-key hotel in Miami Beach; the $38.5-million renovation financing of Garden South Beach, a 133-key, full- service hotel in Miami Beach; and the $22.5-million financing of a land loan for Echo Brickell, a 166-unit luxury condominium high-rise in Miami.

“The Southeastern U.S. is one of the regions that we’re strategically focused on. Aggressive expansion of our Debt & Equity Finance Group here is well supported by our ability to attract the market’s top talent and the strong economic activity and growth prospects,” Mission Capital Principal David Tobin stated. “As we work to expand our coverage of the region, we’ll continue to seek out talented commercial mortgage brokers with skill sets that are strongly aligned with the needs of our clients.”

In his new role, Strongin is responsible for sourcing, structuring and executing both debt and equity finance transactions nationwide. Additionally, he sources and executes commercial real estate investment sales transactions for the firm’s clients.
Prior to joining Mission Capital, Strongin headed the commercial lending group for a major real estate investment trust, and worked as a principal in boutique real estate investment and advisory companies. Career activities include commercial real estate lending, joint venture advisory, non-performing loan valuation and portfolio sales, equity syndication, commercial real estate brokerage, real estate development, and direct real estate investing. He has advised both private and institutional investors including major banks, top tier investment banks, FDIC, and large insurance companies and been directly responsible for negotiating, structuring, and closing over $500 million of real estate equity and debt transactions.
“Mission Capital has demonstrated its ability to execute transactions in Florida and a commitment to growing its Debt & Equity Financing business line in the state and the Southeastern region, and I’m excited to play a part in the expansion,” Strongin said. “I look forward to driving new businesses and cementing the firm’s key relationships in the region.”
In addition, Beyer, who is a graduate of the University of Miami, is relocating to a market with which he is extremely familiar. During his time at Mission Capital, where he is responsible for the origination, structuring and placement of debt, mezzanine and equity capital on behalf of real estate owners and developers, he has completed a number of significant deals. Examples include securing $37 million in financing on behalf of The Siegel Group, which operates flexible-stay apartment communities in Las Vegas known
as Siegel Suites and a highly structured shopping center refinance in the Midwest. He is also raising $30 million in construction financing and joint venture equity for the development of Union Village, a 125-bed skilled nursing facility and 40-bed long-term acute care hospital in Henderson, Nevada.
Prior to joining Mission Capital, Beyer worked for such prominent real estate firms as the Related Companies and a real estate investment bank in New York, where he consummated over $1 billion in equity and debt transactions for real estate companies throughout North America, Latin America and the Caribbean, with a particular focus on hotel assets.
“My time at Mission Capital has been extremely gratifying, and I’m very excited to relocate to Florida and serve as a leader of the firm’s effort to grow its footprint in this part of the country,” Beyer said. “I’m particularly interested in leveraging my experience in the hospitality and senior care sectors to help establish a pipeline of future projects in Florida, where we believe much opportunity exists.”

About Mission Capital Advisors

Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York City, Florida, Texas,
California and Mobile, Alabama. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across commercial and residential loan sales; debt, mezzanine and JV equity placement; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $45 billion of loan sale and financing transactions, as well as in excess of $14 billion of Fannie Mae and Freddie Mac transactions, positioning the firm strongly to provide unmatched loan portfolio valuation services for both commercial and residential assets. Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For more information, visit www.www.missioncap.com.

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Source: Bloomberg

Sales of U.S. delinquent mortgages are accelerating as lenders rush to meet demand from hedge funds and private-equity firms that has sent prices surging. Mission Capital Advisor’s Principal David Tobin discusses the topic.

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