Christopher Whalen, a well-known banking analyst and former senior managing director for Tangent Capital Partners, is joining Carrington Holding Co. as executive vice president, managing director for Carrington Investment Services.
Whalen will be joining the company's investment banking operations at a time when he sees commercial banks leaving the wholesale real estate lending and servicing space and investors searching for yield in the non-bank space.
This transition, Whalen says, creates numerous untapped opportunities for non-bank servicers and lenders.
He sees Carrington pursuing more of these opportunities in the near future while also playing a significant role in servicing, origination and asset management as the firm navigates the post-Dodd-Frank and Basel III world.
He notes that Carrington offers a little of everything to help produce investor cash flow from rentals to mortgage servicing rights. He also finds the company can handle all of the component pieces in-house rather than relying on the outdated model of having different vendors service the investments. And he views this as the model of the future.
"If you look at the Attorney General (AG mortgage servicing) settlement and state law, it is very hard to get into this business unless you have a fully integrated unit," said Whalen. "If you don't have everyone under your roof, it's going to be hard to take care of the tenant and the investor. All of these pieces are different. In order to give people the quality of service they want to see, you have to have tight control of all of the pieces that are going to touch that property."
Whalen told HousingWire there's a whole range of opportunities for companies like Carrington Holdings as investors search for yield.
He added that any lender wanting a special servicer will find strength in Carrington Holdings "because we have come out of the special servicing world, we have had to live with the standards coming out of Dodd-Frank."
"So if you are a lender today, and you have a loan that goes into default, you almost have to think about transferring that loan to a special servicer unless you have something like that in house," he added.
Whalen, who will report directly to Carrington's Chief Investment Officer William King, sees an opportunity to get investors back into the private market. Right now, he says fixed-income investors dealing with a government-subsidized mortgage market get anywhere from two to three points yield.
"If you are taking first loss on a loan you would want 6% or more yield," he explained. "We are going to focus on the nonconforming sector because it is so big and terribly underserved."
Whalen sums up his new role as a position that focuses on two things: marketing new products and helping the company raise new capital.
Prior to this announcement, he was known for co-founding and serving Institutional Risk Analytics as vice chairman of the board and is a frequent contributor to financial publications, including HousingWire and American Banker.
Whalen also has been called to appear before Congress, the Securities and Exchange Commission and the Federal Deposit Insurance Corp. in the past.