Huge investment firm buys nonprime lender

by 16 Oct 2014
Varde Partners, a $9 billion alternative investment firm, has greed to buy Deephaven Mortgage, a two-year-old company that purchases home loans made to U.S. borrowers with poor credit.

The two companies have entered into a purchase agreement, “under which certain affiliates of Värde will acquire Deephaven Mortgage,” according to a statement released by the two companies. Varde will provide more than $300 million of capital to expand the Charlotte, N.C.-based firm and finance purchases of mortgages. Other terms of the transaction weren’t disclosed.

Varde joins investment firms including Lone Star Funds, Western Asset Management Co. and Zais Financial Corp. that are backing or partnering with lenders to enter the market for often riskier mortgages that aren’t eligible for government-supported programs.

“This transaction will allow us to further our mission of providing private-capital liquidity for non-prime residential mortgage loans responsibly made to borrowers who are unable to obtain a traditional government-financed mortgage,” said Matt Nichols, CEO of Deephaven Mortgage.

According to the release, Deephaven is currently working with more than 20 correspondent partners and actively buying non-QM loans.

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