Titan Capital Solutions of Denver is shifting its focus and has begun purchasing lenders’ “scratch and dent” production, that is, loans rejected by Fannie Mae and Freddie Mac and private investors due to data, document and compliance errors with varying degrees of severity.

Adding these kind of loans represents a significant product expansion for TCS, which previously purchased only jumbo loans from its approved sellers.

“Historically, ‘scratch and dent’ referred to loans with egregious errors in underwriting or compliance,” said Mary Kladde, CEO of TCS. “Now we’re seeing the GSEs issue repurchase demands on performing loans due to minor flaws in origination, such as bad comparable selections.

“These performing problem loans provide a significant window of opportunity for TCS to expand. Based on our operational success across the mortgage acquisitions market, we are confident TCS will provide a compelling and aggressive source of liquidity for these loans.” Kladde said. 

Eligible performing problem loans include conventional, jumbo, non-QM and agency-ineligible loans.