Private Equity Creates New Mortgage Servicing Firm

Equifin Capital Partners (“Equifin Capital”), a New York-based private equity firm focused on the financial services industry, announced today that it has partnered with mortgage industry veteran Dennis Stowe to form Residential Credit Solutions, Inc. (“RCS” or “the Company”), an integrated residential mortgage investment and servicing company focused on credit-sensitive and servicing-intensive mortgage assets.  Equifin Capital is leading a group of investors, including Och-Ziff Capital Management, an Equifin limited partner, in a $125 million capital commitment to fund the Company’s growth.

RCS will invest in a broad range of mortgage assets including loan pools, servicing rights, securities and related assets while utilizing its integrated servicing capabilities to manage those assets. Based in Fort Worth, TX, RCS is run by Mr. Stowe and a team of highly-seasoned mortgage industry executives.  The Company also announced that it is acquiring a fully-functional non-conforming mortgage servicing platform, with a staff of 79, based in Los Angeles, CA. In a related transaction, RCS is also acquiring mortgage assets associated with over $700 million of unpaid principal balance to begin its investment program. 

“Our strategy at Equifin Capital is to identify singularly attractive opportunities in the financial services industry and partner with proven management teams to build platform companies,” said Mani Sadeghi, a Managing Partner at Equifin Capital and Chairman of Residential Credit Holdings, LLC, RCS’s parent company. “Our extensive experience in the residential mortgage sector leads us to believe there is a compelling opportunity to build a focused mortgage investment business integrated with special servicing capabilities. We are pleased to have the opportunity to build the Company in partnership with an experienced management team led by Dennis Stowe.”

“RCS will pursue residential markets with attractive long-term fundamentals and compelling near-term opportunities,” said Mr. Stowe. “The weakened underwriting standards of residential mortgage originators, in combination with the cooling-off of the housing market, makes this an attractive time to build the company. Equifin Capital is the ideal partner because of  their deep financial industry experience and success in sponsoring financial services platform companies.”

Mr. Stowe is an experienced financial services executive with 22 years of experience in the mortgage industry, acquiring and servicing mortgages and related assets.  He was formerly President and Chief Operating Officer of Saxon Capital, Inc. where he had primary responsibility for building its servicing operations from an 18-person organization to one that ultimately serviced $25 billion in non-conforming mortgages. Prior to joining Saxon, Stowe resolved portfolios of consumer and residential mortgages on behalf of the FDIC and the RTC during the savings and loans crisis. 

In addition to Mr. Stowe, the Company’s senior management team includes Mark Rogers, Chief Administrative Officer, formerly an Executive Vice President at Saxon Mortgage, Inc. with responsibility for Information Technology, and Chief Financial Officer Robert Harry, formerly the Chief Financial Officer of Walter Mortgage Company, Transamerica Mortgage Company, and Portfolio Acceptance Corporation.