Kondaur Capital Corp., a player in the nonperforming loan market, has slashed its staff by 39%, saying it is having a hard time finding enough available product to purchase.
The Orange, Calif., company's chairman, Jon Daurio, said in an interview Monday that before the layoff of 155 workers, privately held Kondaur had negative cash flow, but after the cuts it will be cash flow positive.
Daurio said he believes accounting rules allow banks to warehouse nonperforming loans without having to mark these problem assets to market at their true value. Asked whether Kondaur was having a hard time buying nonperformers at a price it likes, he said it is more a matter of banks "not even putting these assets out for bid."
Kondaur has roughly 3,000 loans on its books, which it said is a recent "low point for us." Daurio said that he believes many banks are under-reserving on their nonperforming loans. "You have to pay the piper some time," he said. Daurio said that despite the layoffs, the company is growing in other areas, citing the launch of DKR Collateral Dynamics.