Here’s one of the more cryptic press releases you’ll find: Oxford Funding, one of the distressed-asset purchasers looking to swoop in and profit from current mortgage industry conditions, issued a press release this morning touting a new servicing relationship. Oxford said it had entered into a servicing agreement with Quantum Servicing, a subsidiary of ubiquitous due diligence specialist Clayton Holdings, Inc. — interesting news in and of itself as to some growth prospects for Quantum. But the rest of the release left me scratching my head:

Oxford Funding has engaged Quantum Servicing Corporation, a Special Servicing unit of Clayton Holdings, Inc., to service loans. “Oxford Funding purchased nearly $5 million in performing loan portfolios during its first quarter of operations,” said Ron Redd, CEO of Oxford Funding Oxford Funding closed the month of September with an impressive current-to-date performance on the first portfolio of mortgage loans it purchased in August. With the yield generated because of the purchase discount, combined with a couple of early pay-offs, the yield to date on the August pool exceeds 190% on an annual basis.

A so-called “special servicer” like Quantum, for those that don’t know, is the servicing unit that steps in when loans have become non-performing — that is, delinquent or in outright default. The statement above makes it sound like Oxford just placed $5 million in various performing loans with a servicer that specializes in servicing non-performing loans. That’s just for starters – a “performing loan portfolio?” Really? Individual loans, I suppose, are performing or non-performing — but what, exactly, would be the definition of a “performing portfolio” and why would a distressed debt investor buy one in order to then place it with a scratch-and-dent servicing operation? Inquiring minds want to know.