Online RE Auctioneer Expands into ‘Debt Auctions’

Want to buy non-performing mortgage notes? Well, first you’ve got to go where the debt is. One Newport Beach, Calif.-based auctioneer says they have the solution, in the form a new online website designed to manage the auction of debt notes. The LFC Group of Companies, which manages a portfolio of online real estate auction websites, said Thursday that the company has launched BigBidder.com as a tool for investors to buy and sell notes secured by real estate. The company touted its platform as the “first-ever website for auctioning notes online” in a press statement. LFC executives say that the transparency and fairness inherent in the auction process is something that’s been lacking when it comes to transacting in debt — especially in terms of price discovery. Visit the BigBidder.com website. “For years institutional firms and savvy investors have bought and sold notes for profit and to maintain cash liquidity,” LFC senior vice president Paul Lyons said. “We’re breaking away from the traditional paradigm with this powerful tool allowing individual qualified investors and small investment consortiums to diversify their portfolios by investing in notes via a fair and transparent retail process.” While the idea of online auctions of real estate debt may be new, LFC isn’t the first company to look to establish an online marketplace for the exchange of debt — Boston-based DebtX has well-established itself in the market for online distressed debt exchange in commercial real estate notes, and holds multiyear contracts to sell distressed debt for the Federal Deposit Insurance Corp. and the U.S. Department of Housing and Urban Development. The exchange has managed the sale of well over $1 billion in CRE debt over the past 12 months. On March 31, DebtX will sell more than $318 million in secured debt on the FDIC’s behalf; the debt is tied to California-based Security Pacific Bank, which was taken over by regulators late last year. ?“This FDIC transaction is expected to generate strong interest from buyers around the world,” said DebtX CEO Kingsley Greenland. “The FDIC receivership sales are among the growing volume of performing and non-performing loans being sold by global financial institutions seeking to benefit from the liquidity at DebtX’s marketplace.” While the DebtX platform has traditionally focused on a wide range of performing and non-performing loans secured by multifamily real estate, retail, office, industrial, assisted living and business assets, the company has recently managed transactions involving residential notes as well. Write to Paul Jackson at paul.jackson@housingwire.com.