Real Estate, Mortgages and Loans: Crowdfunding PeerStreet Crashes Into Bankruptcy

Enforce the Automatic Stay – Motion

Brewster Johnson is Founder and CEO of PeerStreet.

Prior to PeerStreet, he worked as general counsel at VirtualTourist where he oversaw the company’s sale to TripAdvisor (then wholly owned by Expedia).

Prior to VirtualTourist, he was a real estate attorney at Allen Matkins Leck Gamble & Mallory and a technology attorney at Brobeck Phleger & Harrison.

For over a decade, Brewster has been pursuing his two passions, real estate and technology; he advises and invests in tech startups andis an active real estate developer, investor and private lender.

Brewster graduated from USC with degrees in international relations and history and earned a JD degree from UCLA School of Law.

Brett Crosby is Co-Founder and COO of PeerStreet. Brett is responsible for product,
marketing, PR, sales and business development.

Previously he was Director of Marketing at Google
where his 10-year tenure spanned many of Google’s most prominent products. Most notably he cofounded
Google Analytics, helped start Google’s mobile advertising business, ran the founding
marketing team that launched Google+ and most recently ran the marketing teams responsible for the
dramatic growth of Chrome, Gmail, Docs, and Drive.

Before Google he co-founded Urchin Software
Corporation, a web analytics service acquired by Google in 2005.

He graduated USC with degrees in
international relations and political science and furthered his education with programs at Georgetown,
Michigan State and Semester at Sea.

Ellen is Chief Financial Officer of PeerStreet. Ellen has 15+ years of experience
working in treasury finance at residential mortgage companies, including Countrywide, Nationstar,
and Stearns Lending.

Ellen is experienced in liquidity planning, and has arranged and managed
structured warehouse funding facilities with banks and institutional investors. She earned an MBA
from the Anderson School at UCLA and a BS in Finance from Georgetown University.

Tom Danehey is Head of Asset Management of PeerStreet. Tom has over 30 years of
experience in the banking and asset management industry, over which time period he has held a number
of executive positions and amassed deep expertise managing loan portfolios and resolving problem
loans.

He was previously EVP, Asset Management and Special Servicing at Ciena Capital, LLC.
managing a $2B portfolio of securitized commercial mortgages.

Investor Agreement For Real Estate Securities

Sale expected to generate $90 million for Walter Investment Management Corp.

Walter Investment Management Corp. disclosed last week that the nonbank experienced its third straight quarterly loss, posting a GAAP net loss of $101.8 million for the third quarter.

At the time, Walter Investment Management CEO Anthony Renzi, the company’s fourth CEO in just over a year, said he believes the company is on the right track in an effort to return to profitability.

“I believe that the strategic pillars of capital efficiency, process efficiency and new leadership along with an engaged workforce are the foundation to achieving our goals of delivering consistent profitability and sustainable growth,” Renzi said last week.

Renzi also said that the company is focusing its efforts on “caring for customers, managing risk and generating cash, with a strong emphasis on performance management and controls.”

On Wednesday, the company announced a move that will indeed generate cash flow, enough to nearly wipe out its entire third quarterly loss.

The deal involves a subsidiary of Walter Investment Management selling mortgage servicing rights to New Residential Mortgage, a subsidiary of New Residential Investment Corp., but as it so often is with these types of deals, the details are complex.

Here’s how Walter Investment Management describes the deal:

Walter Investment Management Corp. today announced that certain affiliated subsidiaries of Walter Capital Opportunity Corp. have executed a mortgage servicing right purchase and sale agreement with New Residential Mortgage, a wholly-owned subsidiary of New Residential Investment Corp, pursuant to which, among other things, Walter Capital Opportunity has agreed to sell to New Residential Mortgage MSRs relating to mortgage loans with an unpaid principal balance of approximately $10 billion and that are sub-serviced by Walter Investment’s wholly-owned indirect subsidiary, Ditech Financial.
Walter Capital Opportunity is a private mortgage investment real estate investment trust and an indirect subsidiary of Walter Investment Management.

According to Walter Investment Management, the sale of $10 billion in MSRs represents “substantially all” of Walter Capital Opportunity’s MSR portfolio.

Also, there is an additional “series of transactions” that relate to the sale of Walter Capital Opportunity’s MSR portfolio.

According to Walter Investment Management, New Residential is expected to acquire additional MSRs that carry an unpaid principal balance of approximately $24 billion from Ditech.

This deal will be done in connection with Walter Capital Opportunity’s sale of “substantially all” of its remaining assets, including “excess servicing spread on the Ditech MSRs, which excess servicing spread was previously purchased by WCO from Ditech.”

Walter Investment Management also said that it expects that Ditech will subservice both the Walter Capital Opportunity MSRs and Ditech MSRs that are part of these deal.

So, for Walter Investment Management, the bottom line of all of that maneuvering is that the MSR deals are expected to generate approximately $90 million in cash for the company.

Of the deal, Renzi said: “As I recently discussed on our third-quarter earnings call, Walter Investment’s leadership team is focused on taking actions to enable achievement of our business goals, and to that end we are pleased to announce the execution of (these deals), which represents an important milestone with respect to the sale of substantially all of WCO’s assets and the company’s goal of strengthening its balance sheet.”