John Daurio, chairman and CEO of Kondaur Capital, is stepping down as the day-to-day manager of the nonperforming loan (NPL) investing firm, according to officials close to the situation.
At press time, a spokesman for Daurio and Kondaur declined to comment on the matter. An official announcement was expected to be released within the next few hours, sources said.
The privately held Kondaur is believed to be one of the largest investors in NPLs, a market in which little public information is available because both the megabanks that sell nonperformers and the hedge funds that buy them are loathe to publicize any details about their transactions.
Over the past three years at least $1 trillion worth of home mortgages – including prime and subprime loans – have been declared delinquent, causing a national crisis, but also buying opportunities for vulture funds.
Earlier this year National Mortgage News was the first to report that Kondaur had slashed its loan workout staff by almost 40%. In past statements Kondaur boasted that it is the nation's "largest and most frequent purchaser of nonperforming loans secured by one-to-four family residences, often paying the highest prices on a loan-by-loan basis."
However, executives who manage other NPL investing firms said Kondaur’s returns have been hurt by the fact that it frequently pays too much for product, resulting in lower profit margins.
Kondaur’s backers and partners in NPL investing include such private investing firms as The Carlyle Group, and Tourmalet Advisors.
In other NPL news, PennyMac, one of the largest buyers of nonperforming loans in the nation, revealed in a new SEC filing that a “significant portion” of the distressed assets it buys come from just one “major financial” institution.As for who that seller is, the publicly traded REIT isn’t saying. In the filing the company does not disclose which companies it buys product from and a spokesman declined to provide that information.
“These are private transactions involving confidentiality agreements,” said the spokesman.
That said, the company continues to review many NPL packages for potential acquisition. (It also has a repo/borrowing arrangement with Citigroup.)
During the first quarter the company said it “reviewed 19 mortgage loan pools with unpaid principal balances totaling approximately $2.5 billion. These mortgage loan pools were offered by 15 prospective sellers.”
The company wound up buying distressed mortgages totaling $243 million, of which $227 million came from one seller, it revealed.