Active Management Strategies Across the Spectrum of Residential Credit Markets

Palisades invests and manages assets in one of the largest sectors in the U.S. and around the globe with a multitude of portfolio construction and allocation strategies

Highly Adaptable Strategies in Residential Whole Loan Credit

Palisades is positioned to invest and manage assets across the continuum of residential products throughout the business cycle
Residential Whole Loan Continuum

Performing Loans

Non-Qualified Mortgages
Loan that doesn’t meet the standards of a qualified mortgage as defined by the Dodd-Frank Act and uses non-traditional methods of income verification to help a borrower get approved for a home loan. These types of loans are generally for borrowers with unique income qualifying circumstances.
HELOC and Jr. Lien Loans
Home equity lines of credit are generally collateralized by the excess equity in the property and secured by a subordinate lien on the real estate. Open-end lines of credit allow the borrower to draw against the value of the property up to certain limits, while closed-end junior liens are fully funded with a fixed amortization scheduled at the time of origination.
Re-Performing Loans (“RPL”)
Loans that have been categorized as NPL and/or SPL, but through various means such as loan modification, repayment plans or reinstatements, the borrower has been able to demonstrate an ability to resume making regularly scheduled payments in accordance with the terms of the loan agreement.
Small Balance Commercial
Generally, loans secured by larger balance and/or 5+ unit residential projects that may have some commercial element (e.g. retail).
Scratch-n-Dent Loans (“S&D”)
Loans possessing underwriting, collateral, or other defects that disqualify them for sale through their intended distribution channel (e.g. conventional sale or agency securitization).

Niche, Complex and/or Emerging Sectors

Property Rehab Loans
Loans made to experienced real estate developers seeking to acquire residential properties and executing value-add upgrades prior to sale with terms ranging between 6 and 12 months.
New Construction Loans
Loans made to professional builders seeking to construct residential structures from the ground-up with terms ranging between 9 and 24 months.
Cross Border Loans
Loans to U.S. borrowers secured by properties located in Mexico.
Home Equity Option Contracts
Product that allows homeowners to access home equity without incurring debt service obligations; while investors take direct ownership interest in real estate.
Mortgage Servicing Rights
Or ‘excess servicing rights’, are negative duration cash flows derived from the income associated with servicing residential mortgage loans. Investments may provide a form of interest rate hedge to traditional fixed rate loan portfolios.

Distressed Loans

Sub-Performing Loans (“SPL”)
Loans that tend to be current as to principal and interest for the most recently required payment, past due with respect to previous payments of principal and/or interest, and may be subject to a forbearance agreement or repayment plan for missed payments.
Non-Performing Loans (“NPL”)
Loans where the borrower has ceased making payments in accordance with the terms of the loan. NPL risk factors vary based on the product sector, borrower hardship, geographic location of the property, and other factors that generally garner a complexity risk premium.