Wilbur L. Ross, a billionaire who already has a big interest in subprime mortgage servicing, has invested in a Florida mortgage cooperative whose members originate more than $25 billion a year.
Ross has a majority stake in American Home Mortgage Servicing Inc., a Coppell, Texas-based firm that was assembled from the remnants of Melville, N.Y.-based American Home Mortgage, which failed in 2007, and Option One Mortgage Corp., which was closed by parent H&R Block Inc. in December 2007. Ross’ outfit acquired Option One’s servicing business in 2008.
American Home’s subprime mortgage servicing porfolio currently exceeds $85 billion.
Thursday, a news release indicated that private equity funds tied to Ross have agreed to strategically invest in The Capital Markets Cooperative, while WL Ross & Co. LLC plans to subsequently make significant additional investments.
The investment capital will be used to expand its platform and enhance liquidity at Capital Markets.
Clients of the Ponte Vedra Beach, Fla.-based firm — banks and mortgage companies — reportedly originate $25 billion in mortgages a year.
Capital Markets has a trading desk that helps facilitate the sale of mortgages in the secondary market. The company claims to offer economies of scale to smaller players.
Capital Markets’ executives have reportedly managed more than $500 billion in secondary mortgage volume to date.
“We have been very impressed by Tom Millon, his CMC team and their strong network of partner financial institutions,” Ross said in the statement.
