Dublin, OH—On February 1st of 2010, Cornerstone Quarry Mortgage 2010 A LLC, representing Cornerstone Capital Partners Corporation and Quarry Capital Partners, LLC, as Managing Members, acquired a portfolio of second lien mortgages from EMC Mortgage Corporation, a distressed affiliate of JP Morgan Chase & Co. At the time of purchase, the portfolio consisted of 1,532 performing, sub-performing, and non-performing second lien mortgages with a stated unpaid principal balance of $85 million.
Cornerstone made the decision to invest in the distressed asset portfolio due to the economics of the transaction, to continue to expand its relationship with the servicer to obtain additional economies of scale and to establish a relationship with another partner committed to the residential space. The investment also allowed Cornerstone to leverage its previous experience in working with similar portfolios.
Cornerstone acted as the lead investor in the pool of second lien residential mortgages and invited Quarry to co-invest on an equal basis. This was Cornerstone’s first purchase of loans from JP Morgan, an active seller of assets. When asked, the CEO and Chairman of Cornerstone, Peter Paras, Jr. offered the following comment.
“It was the correct investment choice for three reasons; one, the price was right, two, we gained a new partner for future acquisitions and three, we established a relationship with JP Morgan, an active seller, offering loan portfolios for sale in the future.”
Cornerstone is continuing to add to its loan portfolio having been a lead senior lender, joint equal partner or sole acquirer of both 1st and 2nd lien residential loans, totaling approximately $342 million since 2008.