Marathon Asset Management, New York, a hedge fund that jumped into the nonperforming mortgage market a few years back, will no longer invest in distressed whole loans, according to officials close to the situation.
The fund is in the process of unloading about $90 million in nonperforming loans. One source noted that Marathon, however, will continue on as an investor in corporate securities and ABS.
When prices for distressed ABS were at rock bottom levels a year ago Marathon was a buyer of higher rated tranches.
The company had no official comment. Marathon also controls Marix Servicing of Phoenix, which remains in business.
In other NPL news, FCI Lender Services said that nonperforming loan auctions strong through 2016.
The auction of nonperforming loans will remain strong for six more years, with hedge funds and private investors continuing to drive the market, according to the specialty servicer that's based in Anaheim Hills, Calif.
Gordon Albrecht, an FCI executive vice president, and other executives who play in the NPL space said over the past several weeks they have seen a definite pickup in loan auctions of troubled residential loans.
FCI claims it is the largest servicer of privately held mortgages with a portfolio in excess of $2 billion.
"There was a huge disconnect in the market between buyers and sellers," said Albrecht, a sentiment echoed by other players in the market, "but all that's changed." Jon Daurio of Kondaur Capital, a buyer and seller of NPLs, told National Mortgage News that the first quarter was one of the busiest he's seen in terms of offerings. "Billions were available for sale," he said. "I think we'll see even more in the second quarter."