Credit-Based Asset Servicing and Securitization (C-BASS) founders Bruce Williams and Saul Sanders have formed a new company with the working title of 'Shellpoint' to purchase and securitize jumbo residential lenders, industry sources confirmed to National Mortgage News.
However, it's unclear when this secondary market conduit will launch, and according to one official familiar with their plans, the course they take — and how quickly they move — will depend on how regulators write the final rules on MBS issuance and risk retention.
The two men, who could not be reached for comment, hope there could be plenty of jumbo loans to purchase once the Fannie Mae/Freddie Mac loan limits are reduced from the current cap of $729,750 next fall.
C-BASS collapsed in the summer of 2007 when it was hit by margin calls from its lenders. Formed in 1996, its forte was purchasing and servicing subprime and alt-A mortgage assets.
Although it first ran into financial trouble more than three years ago, it finally filed for bankruptcy protection last month. It listed $1 billion in debts.
Its owners included two mortgage insurers: MGIC Investment Group and Radian. It also owned Litton Loan Servicing of Texas which it eventually sold to Goldman Sachs & Co. (Williams and Sanders were principals in C-BASS as well.)
Both men have extensive backgrounds in mortgage securitizations, including stints at Citigroup, Goldman Sachs and Paine Webber. Many years ago Sanders ran Citi's CitiMae program, a Jumbo conduit. One manager who worked with him said, "Saul was the 'ops' kid. He was very smart and a very capable guy."