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REIT Claiming Mortgage-Bond Territory
Asset Backed Alert, Harrison Scott Publications Inc. (June 24, 2005)
A San Francisco REIT is starting to buy, sell and repackage bonds backed by jumbo and alternative-A mortgages.
The two-year-old operation, Luminent Mortgage Capital, has purchased about $50 million of mezzanine securities backed by private-label mortgages since late May and expects to buy another $30 million of such products per month going forward. At some point next year, it expects to begin packaging those investments into collateralized debt obligations.
As it moves ahead with that effort, Luminent is aiming for July or August to start buying some $100 million of jumbo and alt-A whole loans per month. The company hopes to fund those purchases through a routine series of securitizations beginning later in the year. It is talking to investment banks about underwriting the issues.
Luminent's securitization efforts are based in a Philadelphia office that it opened for the initiative.
Leading the drive is Trez Moore, who joined Luminent in late March. Moore served as the longtime structured-finance chief at bond insurer Radian Asset Assurance before moving to mortgage-insurance affiliate Radian Guaranty. He left in February.
Moore's team currently employs five mortgage and securitization specialists, and he's seeking to bring in three to seven more junior and mid-level staffers. Among those already on board are chief credit officer Ellie Cornfeld and portfolio manager Ronald Viera, both of whom joined from Federal Home Loan Bank. Megan Mahoney, the team's client-relations head, joined from Platinum Direct Funding.
Luminent's primary line of business is investing in agency mortgage bonds.