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NEW YORK CITY-Locally based Newcastle Investment Corp. hasagreed to buy 7,300 subprime residential mortgage loans for $1.7billion. The transaction is expected to be complete in the next 30days, according to company executives.
"We are very excited about this transaction. Constrainedliquidity and the re-pricing of credit risk in the subprimemortgage market have created a unique opportunity for us topurchase a portfolio of loans at an attractive price with earlypayment default protection," says Kenneth Riis, Newcastle CEO andpresident, in a statement. "We have underwritten this investment togenerate an attractive return on capital using conservative defaultand loss assumptions."
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