Mortgages: Roundpoint picks up RBS USA assets from FDIC - kind of
RoundPoint Financial Group started its Christmas party early when it confirmed on 23 December that it had taken a slice of the RBS Financial Products Inc loan portfolio. But while they may be happy, some others may be wondering what's going on.
The loan book is worth, in US terms, a measly USD603 million - and that's after write downs resulting from the generally miserable state of the housing market in many sectors.
The loans book has been in the hands of FDIC for about two years. Now FDIC has created a new company into which the pool of RBS loans has been transferred.
RoundPoint has bought 40% of that company, leaving FDIC (and therefore the whole industry) as a backstop for 60% of losses if more result.
It's part of a grander scheme: RoundPoint will manage the whole package of loans in the same way as it is already managing another bundle from FDIC in April: that was worth USD491 million.
It's not fair to see RoundPoint as a vulture fund although its timing and activities may suggest that: it was founded in 2007, as "a fully integrated mortgage investment firm that specialises in the acquisition, management, originations and servicing of mortgage loans."
But, as the company makes clear in the small print, what it is really interested in is "assisting financial institutions in refinancing their distressed assets."
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