We Buy "Toxic Assets" for a Fraction of Face Value or Unpaid Balance
Investor funds are used to purchase distressed residential real estate debt which has little chance of ever becoming a performing loan again, at commensurately low prices - generally a small fraction of the face value or unpaid balance. We buy mortgages in New England with the following characteristics:
• The loan is severely non-performing
• The loan is "upside-down" (i.e. there is no equity in the home)
• The home is (typically) a single family residence detached dwelling
• The home is owner occupied and is the homeowner's primary residence
…Move to Liquidate the Underlying Assets Quickly…
Our economic model is based on selling the underlying properties as quickly as possible in order to maximize return on invested capital. We try to quickly reach an agreement with each homeowner to begin the process of liquidating the asset in a sale to a third party. The homeowner usually has three options: sell the house in a Short Sale (homeowner lists with our broker, priced below market to sell quickly); surrender the title to Scudder Bay for us to sell the house; or do nothing and we will foreclose as quickly as legally possible and sell the house. The first two options are much more favorable for the homeowner; nonetheless, we initiate foreclosure proceedings on every home as soon as we acquire the loan so that no time is lost and the homeowner has an incentive to cooperate.
…And Make Sure the Homeowner Gets a Fresh Start
In exchange for the homeowner's agreement to either put the house on the market for a "short sale", or turn the deed over to us, we offer a package that includes a meaningful cash payment, moving and relocation services and credit counseling. Most importantly, Scudder Bay agrees to wipe clean any deficiency and provide the homeowner with a full release when the home is ultimately sold. We are committed to helping cooperative and deserving homeowners find a new place to live, and to providing them with funds for living expenses, paying down credit card bills, and rebuilding credit.
Scudder Bay Actively Works Each Transaction to Ensure Success for All Involved
Unlike other buyers of distressed debt, we are not looking to simply modify loans or to resell the asset. Scudder Bay's "hands on" approach means we will quickly and efficiently put homes on the market and turn the loans into returns for our investors. We connect with our homeowners as soon as legally possible to begin arranging a successful transaction. If homeowners cannot be reached by phone, we visit their homes to meet with them in person; in addition to expediting the process, this outreach demonstrates our earnestness and commitment to achieving the best possible outcome for each homeowner.
If you are interested in learning more about investing in Scudder Bay's socially responsible funds, please contact one of the managers.