Ultraprise Corp., an upstart company that enables bankers and securities traders to buy and sell pools of funded loans on the Internet, plans to raise $15 million in capital in a private placement deal managed by Friedman, Billings, Ramsey & Co., sources familiar with the deal said.
Further details of the transaction were not available. Principals associated with both companies would not confirm a deal.
Ultraprise, a Shepherdstown, W.Va.-based company that began operating in February, is another in a long line of financial services companies seeking its fortunes on the Internet. Its service could open the secondary mortgage market to a wider audience of buyers and sellers.
The service has 308 subscribers that trade about $2 billion of loans posted on its site. Each pool typically contains 30 to 1,000 loans.
Buyers such as GE Capital or mortgage traders from Salomon Smith Barney or Donaldson, Lufkin & Jenrette can use the service to view pools of loans, sort loan data, get a weighted average of credit scores, and obtain individual borrower profiles. The buyers electronically transfer these data to their own loan pricing models to arrive at an estimated market price. They then bid on the loan pools, negotiating with the seller.
Buyers pay Ultraprise a fee of $35 to $75 for each completed transaction, depending on whether the deal involves conforming, subprime, or high-loan-to-value-ratio loans.
"We see ourselves as creating an exchange, bringing liquidity to the market," said Steve Campbell, a spokesman for Ultraprise. The company has 100 employees and offices in California and New York, and it plans to open an office in the Dulles, Va., area.
GE Capital joined Ultraprise.com in October to invest in pooled loans using brokers and correspondents. It views the service as another sales channel to invest in pools of mortgage loans, said John Lewis, a spokesman for the Raleigh, N.C., company.
"It is a pretty efficient channel," Mr. Lewis said. "What Ultraprise allows us to do is potentially bid on more bulk packages of loans that are available on the market."
He declined to comment on any further relationship GE Capital might have with Ultraprise.