Integrating experienced team members focused in capital markets, internet technology, mortgage acquisition and portfolio management, with a fully-integrated business model and a servicer built from scratch, The Winter Group (TWG) has managed to securitize 16 home equity ABS deals this year alone. Additionally, its underwriting unit, Terwin Capital, has acted as lead manager on 13 of the transactions priced this year and has landed four third-party co-manager roles.

A residential mortgage company, TWG, also known as Terwin, has a distinctive front-to-back fully integrated platform in which it acquires, securitizes and services residential mortgage loans by leveraging its relationships with a variety of companies.

As of year-end 2003, TWG acquired $3.7 billion of residential mortgage loans, with this year's goal set at $5.3 billion, and plans to hit $6 billion next year, according to CEO and co-founder Richard Winter.

The company securitizes the loans it acquires under the Terwin Mortgage Trust shelf specializing in three core collateral types - closed-end seconds, Alt-B (or low-end Alt-A) and HELOCs. "That's one thing about us - our deals are very consistent," said Winter. "They tend to look and act very similar."

TWG serves as an umbrella for three companies - including Terwin Advisors, which handles the acquisition of mortgages and the purchase of raw loans; Terwin Capital, the company's NASD broker/dealer where all securities are underwritten; Terwin Money Management, a third-party money-management business focusing on intermediate and high-grade credit, asset-backed securities and Specialized Loan Servicing (SLS), the company's servicing platform, specializing in subprime, second lien servicing and loss mitigation. Through SLS the company aims to create a dedicated servicing operation to service and protect the value of the loans it acquires.

As of August 30, 2004, SLS has serviced over 12,500 mortgage loans with an aggregate unpaid principal of approximately $2.1 billion and has plans to have SLS service all of its loan acquisitions in the future, including the loans it retains in its portfolio, according to corporate information. Together, these companies function as separate units of TWG, totaling about 65 employees.

"Our core business model is the idea of being fully integrated, gaining as much of the efficiency as possible from that end and being able to offer our securities at more attractive levels," said Winter. "Another key aspect about our company is that we have a servicer to ensure performance." In addition, the company utilizes the Internet to purchase some of its loans, offering a lower cost basis and therefore the ability to offer securities at more attractive levels, Winter added.

Founded in September 2002, by a group of 10 individuals that had previously comprised an industry leading investment-banking team from 1995 to 1999 at Donaldson, Lufkin & Jenrette and subsequently Credit Suisse First Boston, Winter tapped Thomas Guba to serve as president of the firm.

TWG's leading strategic relationship is with Merrill Lynch, which serves at TWG's primary liquidity provider, offering the company both warehouse financing and term debt. In addition, Merrill has led approximately one-third of Terwin's term securitizations (see chart).

TWG's second-leading strategic partnership is with GreenPoint Financial, as The Winter Group's number one collateral source, totaling 28% of its loan acquisitions. Also, TWG holds loans originated from 45 different correspondent lenders, added Winter.

To date the company has issued 26 mortgage related ABS deals and this January made its debut as an underwriter. Terwin has since acted as co-manager on three more HELOC ABS issued by GreenPoint, backing up bookrunner Wachovia Securities.

Most recently, Terwin was co-manager on GreenPoint's Wachovia-led $211 million series 2004-4 HELOC transaction, which priced Aug. 24. The single-tranche Ambac-wrapped deal, with an average life of 2.42 years, priced at 28 basis points over one-month Libor.

Apart from having its headquarters in New York, the company also has offices in Los Angeles, and San Francisco, with a sales office in the Washington D.C., area. Pat Doyle, partner at the firm, heads the San Francisco office.

Copyright 2004 Thomson Media Inc. All Rights Reserved.

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