Carrington Mortgage Holdings will close the year having bought $800 million in nonperforming loans, surpassing company expectations.

The loans, which have an unpaid principal balance of roughly $1.6 billion, were purchased earlier in the year. It’s a key strategy of Carrington Mortgage, which holds a servicing operation.

“It’s one of the rare instances in our industry where everyone’s interest is aligned," Carrington executive vice president Rick Sharga said. "Our initial intent with all of those loans is to modify them and keep the borrower in the property. If we can do that, then that delivers the best financial return to our investors.”

As note holders clear distressed loans from their books, an accelerated recovery of the housing market could begin. SunTrust (STI) intends to transfer about $3 billion in nonperforming commercial real estate loans, delinquent Ginnie Mae loans, and delinquent and current student loans to loans held for sale.

Sharga said the market is showing much more activity this year than last year, which is a sign lenders and other note holders are beginning the process of clearing their books.

“There’s been a lack of available pools to purchase in recent years," Sharga said. "For some reason, it looks like the market is ready to become active again."

jhilley@housingwire.com