AssetExchange Breaks Into Commercial Mortgage Loan Sales

Trying to be a leading middleman for the disposition and acquisition of loan portfolios over the Internet, local startup AssetExchange.com is showing it can do commercial real estate deals along with residential mortgages.

AssetExchange.com helped Nevada-based Redwood Commercial Funding Inc. locate a buyer for a portion of its commercial loan portfolio. Redwood posted a $27 million portfolio on the AssetExchange.com web site in late March. A buyer identified the asset as an acquisition opportunity within two weeks of its posting, and a $3 million asset from that portfolio sold on July 26.

Redwood Commercial Funding, an affiliate of Redwood Trust Inc.(NYSE: RWT), originates, services and sells high-quality short-term commercial bridge mortgage loans. Sherry Poundstone, commercial loan trader for Redwood Commercial Funding, says she is happy with the sale and will partner with AssetExchange on other secondary market transactions.

Portland-based AssetExchange.com now has 21 commercial mortgage, residential mortgage and credit card portfolios for sale online from various financial institutions. The company future plans include auto and other loan portfolios.

AssetExchange president William Koo told GlobeSt.com he expects the expanded service to attract even more interest from the financial services community, including large national banks, community banks, insurance companies, credit unions, hedge funds and mortgage REITs.

To be included in this network, buyers and sellers simply register at the site, www.assetexchange.com. Buyers can be notified automatically by phone, e-mail or fax when listings are posted for sale that fit their criteria. Sellers work with AssetExchange.com to package their portfolios for sale.

The site allows secure, anonymous sharing of summary or detailed information that can be downloaded for analysis, as well as photographs of properties in the case of real estate portfolios. The company earns a commission at the time a transaction occurs. The lower costs of the Internet service mean a lower commission fee for parties to a transaction than that paid through a traditional brokerage process.

The venture-backed concern is running on seed money from angels right now, and is currently hunting for another angel round to keep it going while it builds itself up for a larger, institutional round. To that end ,Woo said he gave a presentation to the Portland Angel Network last week, and has given presentations to various investors in California as well. Woo hopes to have another $500,000 to $1 million in hand by the end of the third quarter.