Arch Bay Capital, an active buyer and seller of nonperforming mortgages, is on the verge of jumping into the origination market and is busily gathering lending licenses in several states, according to officials briefed on its plans.

A nonbank based in Irvine, Calif., Arch Bay made news last year when it bought $600 million in nonperforming loans from Wells Fargo & Co. It also recently issued a bond backed by nonperforming loans.

A company official confirmed that Arch Bay is working on something tied to originations but would not comment further.

The firm, though, has created a Web site for a unit called Arch Bay Mortgage LLC that says "Coming Soon."

Industry sources said some of Arch Bay's financing comes from a special fund controlled by partners at Goldman Sachs & Co.

A lender in Southern California said he has heard of Arch Bay's plans, but he questioned its timing.

"They're getting in at a time when fundings are shrinking," he said.

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