Mortgage Funding Conduit

Division: Phoenix Management Services


The client was a Mortgage Funding Conduit.


A European Bank developed a $130 million mortgage conduit, in conjunction with a local construction lender, to fund mezzanine loans to Florida real estate developers. The conduit consisted of over 100 separate projects. As the Florida real estate market softened significantly, the conduit’s default rate escalated rapidly. The European bank lost confidence in the management of the conduit by the local construction lender.


Through their attorneys, the European Bank, hired Phoenix to evaluate the underlying collateral and advise it on the best course of action, including: taking over and completing projects, paying off first lien holders to control the operations, land banking the deals, and abandoning. After this analysis, Phoenix assisted the conduit be taking responsibility to manage the implementation of the strategy for each project.