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Specialized Loan Servicing Gets New Owner after Terwin Default

Do we have the first victim of servicing advances? Highlands Ranch, Colo.-based Specialized Loan Servicing said last week that Lexia LLC, a wholly-owned subsidiary of Tokyo-based Shinsei Bank, Ltd., had acquired an 82.35 percent equity interest in the company on Sept. 8. The bank took over the firm after a unit of former majority holder Terwin Holdings LLC had defaulted on its credit obligations in late July. Well-known industry exec Richard Winter stepped down from Terwin Holdings after the company ran into what Specialized CEO John Beggins characterized market headwinds. "I do not believe that anyone that is receiving this communication is surprised by the devastation that has been caused by the crumbling state of the mortgage business on the origination and broker/dealer side," he said in an internal company email dated July 17, and obtained by HW. "Terwin Holdings has been negatively impacted by the markets." It's not known exactly what brought about Terwin's demise, but some HW sources expressed candidly that the company's finances were negatively impacted by "extended floating" of servicer advances. Terwin's 75.44 percent stake in Specialized was auctioned off on Aug. 19; no bidders emerged, leaving the interest to Shinsei as primary creditor. Not that Beggins was complaining. "Shinsei Bank is a leading Japanese financial institution with a strong track record in the distressed debt space," he said in a press statement. "The financial credibility that we gain through this arrangement, complimented by SLS' highly regarded special servicing capabilities, provides the ideal servicing platform for our existing clients and positions SLS strongly for future growth." Specialized Loan Servicing manages more than $9 billion in residential servicing. For more information, visit http://www.sls.net.

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