Our investors are corporate institutional and private players that are experienced in the acquisition of debt. But given where community and regional banks can afford to trade, it needs to be on a one-off basis. Today, we are placing one-off, non-performing loans with the traditional, local real estate investor.

To get more specific, most of our exclusive assignments have been on behalf of lenders on a one-off basis on trades less than $25 million, and we trade either via a mass marketing campaign or on an off-market basis depending on what the lender prefers. Most of the trades recently have been multifamily mixed-use throughout New York and New Jersey. But we’re also seeing more retail and office come into play. The trades we do are not at tremendously steep discounts at all. Given the fact that, again, they are being sourced from community and regional banks that simply can’t afford to take huge haircuts. In addition, the values have not depreciated all that significantly. And the investors that are buying the loans currently have portfolios within those submarkets.

GlobeSt.com: Have you seen more trades in recent months?

Horn: What we have seen over the past six months is some larger pools trading ($150 million to $500 million). In the past, you did not see this other than through the acquisition of other banks, FDIC sales or sales through DebtX or Mission Capital. Now, we’re seeing these larger pools being sold directly from the institution itself. We feel as though those large institutions weren’t realizing the same returns on large pools of loans through the FDIC, DebtX or Mission as they would on an individual, one-off basis.

These institutions tired to trade on their own on a one-off basis but then ultimately found it easier and more efficient to trade a larger pool to a hedge fund or a private equity fund. And that’s what we’ve seen. Those funds are now hiring us to dispose of, or trade, some smaller pools from those larger pools.

GlobeSt.com: Do you think we will continue to see a pattern of more loan sales in 2011?

Horn: Yes. Believe it or not, in New York and New Jersey, non-performing debt is trading almost at the same level as it would for an REO. You’re not getting huge discounts on debt. So it gives you an opportunity to trade at almost an equal level as an REO. Why not sell the debt as opposed to going through the foreclosure process, which could be anywhere from one to three years. This can also be attributed to the fact that you have a ton of maturities in 2011 and 2012. A lot of community and regional banks tried to workout or modify with borrowers in the hopes they could do something, but unfortunately a lot of times it’s proven unsuccessful.

GlobeSt.com: What does Helios plan to focus on this year and in 2012?

Horn: We are focusing on more exclusive assignments on behalf of the lenders because we’ve really been successful here. We’re getting more of those exclusive assignments. The first year we did about $30 million to $40 million in business and the second was between $50 million and $70 million. We really believe in the third year it could be anywhere from $150 million to $300 million. We think it can grow that quickly.The focus will still be on community and regional banks, small-balance debt where we feel like there’s still less competition and fewer experienced borrowers, therefore making it easier to get to the assets through foreclosure or deed in lieu.