Former C-Bass principals Bruce Williams and Saul Sanders have started a company with the working name of Shellpoint to buy and securitize jumbo residential loans, industry sources said.
However, it is unclear when this secondary market conduit will launch. And according to an official familiar with the two men's plans, the course they take and how quickly they move will depend on how regulators write the final rules on mortgage-backed security issuance and risk retention.
The two men, who could not be reached for comment, likely hope there could be plenty of jumbo loans to purchase once the Fannie Mae/Freddie Mac loan limits are reduced from the current cap of $729,750 next fall.
C-Bass, formally known as Credit-Based Asset Servicing and Securitization, collapsed in the summer of 2007 when it was hit by margin calls from its lenders.
The company was formed in 1996, and its forte was purchasing and servicing subprime and alternative-A mortgage assets.
C-Bass first ran into financial trouble more than three years ago, and filed for bankruptcy protection in November. It listed $1 billion in debts.
Its owners included two mortgage insurers: MGIC Investment and Radian. It also owned Litton Loan Servicing of Texas, which it eventually sold to Goldman Sachs Group Inc.
Both men have extensive backgrounds in mortgage securitizations, including stints at Citigroup Inc., Goldman Sachs and PaineWebber.
Many years ago Sanders ran Citi's CitiMae program, a jumbo conduit. One manager who worked with him said, "Saul was the 'ops' kid. He was very smart and a very capable guy."
