Newcastle Investment Corp. (NYSE:NCT) said Friday that it will purchase a $1.7 billion portfolio of approximately 7,300 subprime residential mortgage loans, a portfolio sources have told HW was sold by troubled subprime lender Accredited Home Lenders Holding Company (NASDAQ:LEND).
Accredited announced that it had sold $2.7 billion of its loans on March 16, saying the sale -- which was completed at a significant discount -- would generate additional liquidity to allow it to continue to operate. It did not indicate at that time who had purchased the loans, nor the discount associated with the sale.
Newcastle is a REIT affiliated with Fortress Investment Group LLC, an investment firm that also owns subprime lender Nationstar Mortgage. Fortress purchased the subprime mortgage banking operations of homebuilder Centex in March 2006 in a deal worth approximately $575 million, which it then renamed Nationstar Mortgage.